Image: 717 Bourke St Melbourne VIC
As demand remains strong for A Grade commercial assets in Melbourne, Retail Employees Superannuation Pty Ltd (Rest) owners of 717 Bourke Street in Melbourne have listed the asset for sale.
The property is one of only four freehold office buildings in the Melbourne CBD with direct access to Southern Cross Station and a clear pathway to achieving carbon neutrality.
With a price guide of AU$490 million-plus, the 17 storey, 43,200 sqm building offers market leading End-of-Trip and wellness facilities, large efficient floorplates of circa 3,000 sqm and boasts highly committed major global corporate tenants including Nine Entertainment, BP, NEC and AIG.
The building is exclusively for sale through Leigh Melbourne, Nick Rathgeber, Josh Cullen and Mark Hansen of Cushman & Wakefield and Paul Kempton, Trent Preece, Ben Schubert and Neil Brookes from Knight Frank. The building offers a WALE of 4.3 years and its built-in rent reversion with strong income growth is second to none across the Melbourne CBD.
According to Leigh Melbourne, “Melbourne remains one of the safest destinations for investment as the Australian economy has proven to be one of the world’s leaders throughout the toughest time of the COVID-19 pandemic.
“The GDP contraction of 2020 was one of the lowest in the region, following the reopening of international borders, and the recovery and forecast remains positive,” he said.
According to Paul Kempton, “The market has changed over the past few months. The pleasing aspect is that it is not a liquidity issue - there is capital, and the change in capital mentality is that it is seeking ‘core plus’ and growth opportunities.
“This change has stemmed from the inflationary environment and interest rate rises, whereby capital is now seeking high-quality assets with core plus attributes - exactly the profile of 717 Bourke Street,” he said.
Behind 717 Bourke Street’s distinctive façade, the building features A-Grade specifications with security concierge, floor- to-ceiling windows, 360-degree views, car parking for 382 cars, eight retail units across two levels and a 4.5 Star NABERS Energy Rating.
Melbourne is undergoing a substantial transformation with a number of high-profile infrastructure projects that will futureproof the city. 717 Bourke Street sits almost directly on top of the Southern Cross transport hub and will directly benefit from the completion of the airport railway and the suburban rail loop.
Mr Rathgeber said the sale will capitalise on the strong levels of interest from both onshore and offshore investors, bolstered by the continued strength of the Melbourne market and continued attractiveness of Australia.
According to research from Cushman & Wakefield, Melbourne’s population is forecast to continue growing at ~1.7% over the coming 10 years, overtaking Sydney late in the decade.
On the back of this population growth, white collar employment is also forecast to continue growing, producing a requirement for more office space in the CBD.
With this backdrop, Melbourne will soon overtake Sydney to be Australia’s largest office market (by sqm) with high-quality assets the absolute focus for major corporate and government departments.