Property Development

Zagame Family Buys Melbourne Office Building for $21m

Written by The ReReport
As seen in the Source link, written by theurbandeveloper.com on 2019-02-13 15:14:07

Melbourne’s Zagame family has snapped up the former premises of the Victorian branch of the Australian Education Union (AEU) for $21 million in Melbourne’s booming fringe office market.

The 4-storey building, located at 112 Trenerry Crescent in Abbotsford, was brokered by Fitzroys agents Paul Burns and James Lockwood following an expression of interest campaign.

New owners, the Zagames, who hold a diverse property portfolio including a number of hotels, pubs, shopping centres and industrial projects, have indicated the existing building will be kept and re-used.

Domestic and international groups actively targeted Melbourne’s fringe suburbs in recent months, propelled by the overall economic environment and the underlying fundamentals driving tenant demand.

Melbourne’s fringe office market recently hit a vacancy rate of 6.8 per cent.

“Office vacancies across Melbourne’s city fringe have been tightening to historic lows and businesses are increasingly looking to Abbotsford as the next hotspot for commercial activity,” Burns said.

Agents said 15 offers were received from a mix of local and offshore bidders, predominantly made up of developers, with some partial owner occupiers.

“Bidders had schemes for a mix of office and residential uses for the property, looking to take advantage of the property’s recent rezoning to mixed-use,” Burns said.

Pricing guidelines were to $20 million when the property was put on the market in October.

Commercial development sites across like Cremorne and Richmond have continued to drive strong capital growth with local agents now reporting net rents are in excess of $500 per square metre for new office space.

More than 50 office projects, comprising 615,000sq m, have had plans approved, submitted or proposed in Melbourne’s fringe precincts.

Commercial development sites across like Cremorne and Richmond have continued to drive strong capital growth with local agents now reporting net rents are in excess of $500 per square metre for new office space.