Melbourne office market hub for offshore buyer activity

The Melbourne office market has become the focal point of offshore buyer activity, with more than $100 million worth of office stock changing hands in the past week.

In the latest transaction, a Singaporean listed company Hotel Grand Central has purchased a strata office building in the heart of the city for $48.5 million.

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The 300 Flinders Street (pictured above) transaction comes just a day after Hiap Hoe - another listed Singaporean property company - made a $43.8m purchase of an office building in nearby, 380 Lonsdale Street (pictured below).

At $48.5m, the 300 Flinders Street deal represents one of the largest transactions in the city for a strata property.

The 12-storey strata building is owned by the Victoria University and was sold on a yield of 8.3%, through selling agents Clinton Baxter and Nick Peden of Savills.

The agents noted that while the property attracted numerous tenders from local and offshore parties, the strongest bidding came from Singapore an Malaysia.

Research from Savills showed that foreign investment in Melbourne’s CBD is at record levels. It estimates the foreign ownership market share is around 25% so far this year, following a spending spree of upwards of $260 million since the end of June.

On the same day the Flinders St transaction was revealed, a private developer based in mainland China snapped up a prime Bourke St office building for $15 million.

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The 472 Bourke Street property (picture above), formerly known as Equity Chambers, sits on an 1162 square metre site with "significant development potential", according to the Savills selling agents, who also negotiated the sale.

"There are many reasons behind these recent sales, chief among them being Melbourne’s nomination as the world’s most liveable city for the third year in a row, access to our highly regarded education sector, and the low Australian dollar which is providing exceptional value for off-shore buyers due to the favourable exchange rate"' said Mr Peden.