St Kilda office building snapped up by Hong Kong retail group for $42 million

St Kilda office building snapped up by Hong Kong retail group for $42 million
St Kilda office building snapped up by Hong Kong retail group for $42 million

Hong Kong retail group Glorious Sun has acquired an entire office building on Melbourne's city fringe for $42 million.

The property at 324 St Kilda Road, near Dorcas Street, was bought from the WA-based investment manager Lester Group.

The fully leased eight-level building has tenants including Wesfarmers with a weighted average lease expiry of five years.

With its net annual income of about $2.45 million, the early 1980s building sold on a yield of 5.8 per cent.

"The implementation of the Melbourne Metro Rail Project has improved confidence in the St Kilda Road area, resulting in increased momentum from investors in the precinct due to expected upward pressure on rents from the significant infrastructure project," JLL's Langton McHarg said.

Vacancy has been tightening on St Kilda Road with eight office blocks withdrawn from the St Kilda Road office market over the last five years totalling 71,693 sq m, leaving 672,950 sq m in available stock, JLL Research shows. Four more are likely to be withdrawn over the next two years, JLL suggests.
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