A Singaporean public company, Chip Eng Seng, has paid around A$45.2 million for a landmark St Kilda Road property, continuing the trend of major Melbourne commercial assets being snapped up by Singaporean groups.
A Singaporean public company, Chip Eng Seng, has paid around A$45.2 million for a landmark St Kilda Road property, continuing the trend of major Melbourne commercial assets being snapped up by Singaporean groups.
The sale of 420 St Kilda Road, which represents the second largest transaction in St Kilda Road this year, follows other recent transactions by Singaporean listed groups such as Aspial’s purchase of 383 King Street for A$41.5 million, Hotel Grand Central’s purchase of 300 Flinders Street for A$48.5 million, and Hiap Hoe’s purchase of three separate properties for a total of A$177 million including a car park and office building at 380 Lonsdale Street for A$43.8 million.
According to Savills directors, Clinton Baxter and Nick Peden, who negotiated the Expression of Interest sale of 420 St Kilda Road on behalf of a local private investment group at A$45,280,000 at an 8.1 per cent yield, the property had attracted exceptionally strong interest from a broad range of local and offshore investors.
“The property offered very attractive investment credentials including a prime corner location, exceptional views and natural light throughout the building, strong tenancy profile, attractive yield, and views and future value-add opportunities.”
“We received numerous offers for the property from a wide range of local and off-shore purchasers,’’ Mr Baxter said “with strongest bidding coming from Singapore, China and Malaysia.”
“The sale of this property is a further demonstration of the exceptionally strong off-shore buyer demand for high quality Melbourne investment assets, and shows that groups based in Asia will happily look beyond the CBD grid to secure assets of appropriate quality,’’ Mr Baxter said.
The modern 11 level office building offers views across St Kilda Road, plus Albert Park, Port Phillip Bay and beyond, natural light throughout and a high standard of accommodation.
Mr Peden said the 10,528 square metre (NLA) property was sold on a fully leased basis with income totalling A$3.6 million per annum net – equating to A$4,300 per square metre of NLA - with fixed rental growth built in to most leases.
The purchase by Chip Eng Seng is its fifth in Melbourne since first entering the market in 2010, and its first foray into the commercial investment market. Other acquisitions by Chip Eng Seng include 150 Queen Street (Tower Melbourne site), 33 MacKenzie Street in the CBD (33M development), a portion of Grocon’s CUB site in Carlton, and a large residential development site in Doncaster last month for A$19.28m.