Well-known property figure John Beville has sold an office building in St Kilda Road for $163 million.
Beville listed the property in August, which sits across a 6,000sq m site at 509 St Kilda Road. The 7-storey office tower offers 19,500sq m net lettable area and is fully leased to major tenants including the federal government, Fuji and AIA insurance.
The title names the purchaser as Da Xie, a mainland Chinese investor. The sale was struck on a fully leased yield of 4.96 per cent and a building rate of $8,300 per square metre.
Melbourne’s office vacancy rate is the lowest it has been in 30 years, currently sitting at 4 per cent in the CBD. The St Kilda Road locale has experienced some of the strongest net effective rental growth in the country, CBRE’s Kiran Pillai said.
“The strong fundamentals of the St Kilda Road market [has] spurred investor interest in what is increasingly being viewed as a natural extension of the Melbourne CBD Hoddle Grid,” Pillai said.
Pillai brokered the sale along with CBRE’s Lewis Tong, Josh Rutman, Mark Wizel and Luke Etherington.
International investors have come in hot on St Kilda Road, with a run of major transactions over the last 12 months pushing property prices up along the boulevard.
Prior to the sale of 509 St Kilda Road, Singapore’s Mapletree held the record of the highest price paid in the precinct, paying $144 million for 417 St Kilda Road a year ago.
Singapore’s Tong Eng Group snapped up 312 St Kilda Road for $76 million last year, while another Singaporean firm Rockworth acquired 390 St Kilda Road for $98 million.
Earlier this year, Abacus pooled together with Singapore’s Wing Tai Holdings to acquire 464 St Kilda Road for $95 million.
And last month, a Malaysian developer picked up the Habitat HQ backpacker centre on St Kilda Road.