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Deka Immobilien acquires Melbourne office tower for $454 million

Luke Etherington • 11/09/2020

In one of the most significant Australian office market transactions since the COVID-19 pandemic, German investor, Deka Immobilien has acquired a 22 level A-grade office tower at 452 Flinders Street, Melbourne, from the Dexus Wholesale Property Fund for $454 million.

Cushman & Wakefield’s Luke Etherington, Sunal Patel and Sarah Baker managed the off-market campaign on behalf of Deka Immobilien, with client support provided by Richard Butler and Mark Hansen. The sale is expected to settle in mid-November 2020, pending approval from Australia’s Foreign Investment Review Board (FIRB).

452 Flinders Street was sold fully occupied with a tenant mix comprising exclusively government, national and international corporations. This included recently signed leasing agreements with tenants including V-line and Jacobs Group.

452 Flinders Street Melbourne

The 38,000 sqm commercial office tower located in Melbourne’s CBD has large ~2,700 sqm floor plates with views across the Yarra River. The building includes 17-levels of A-grade office space, a three-level basement car park, ground floor retail, mezzanine level office, auditorium and end-of-trip facilities.

The property was acquired in 2011 by the Dexus Wholesale Property Fund and was subject to significant upgrade works including to the sky garden, lobby and extensive plant & equipment upgrades.

Cushman & Wakefield’s Head of Capital Markets, Victoria, Luke Etherington, said: “The landmark acquisition of 452 Flinders Street is one of only a few major Australian office deals to have transacted this year and was completed while Melbourne remained in hard lockdown. This is an outstanding result given the unique challenges surrounding COVID-19.”

“The competitive off-market sales process also saw multiple potential purchasers vie for the property. This, combined with Deka Immobilien’s unwavering interest in the asset through the pandemic, sends a clear signal that confidence in the outlook for Melbourne’s commercial office market remains strong,” Mr Etherington concluded.