Off-market Melbourne office sale highlights ongoing investor demand

HThree City Australia has acquired Melbourne’s 446 Collins Street office tower from a Vantage Property Investments client for $72,625,000.

The purchase represents HThree’s maiden acquisition in Australia and is in line with its strategy of investing in well located properties with strong value add potential.

Strategically located near the corner of Collins and Queen streets, in the western core of Melbourne’s CBD, the 12-storey freehold building accommodates an NLA of over 5,500 sqm and features a 4-star NABERS energy rating.

Anchored by the newly completed Collins Arch, the rejuvenated western core provides excellent surrounding amenities such as the W Melbourne hotel, Market Street Park and quality restaurants and cafés within a short walking distance.

446 Collins Street also benefits from superb accessibility, with close proximity to public transport links including the Flinders Street and Southern Cross railway stations, as well as having a Collins Street tram super stop directly in front.

The off-market deal was brokered by CBRE’s Kiran Pillai, Scott McGlone, Mark Coster and Stuart McCann during a particularly challenging time when both Melbourne and Singapore were in various forms of COVID-19 induced lockdowns.

The experienced HThree team, led by CEO Kevin Kang, leveraged its strong track record, in-depth market knowledge and extensive network of consultants and advisors in Australia, to complete the transaction within a short, 10-week window.

Mr Kang said, “I am proud of the team for successfully completing HThree’s maiden Australian acquisition in this challenging climate of lockdowns and travel restrictions. Notwithstanding the increasing prevalence of work-from-home arrangements, we are strong believers in the office sector and even more so of the Melbourne office market. There will always be a need for companies to have a physical office space, although the form of the office environment as we know it now will evolve over time.”

CBRE’s Mr Pillai said the 446 Collins Street sale highlighted ongoing buyer demand for Melbourne investment opportunities.

“The strength and speed of the deal speaks volumes in relation to the emphasis that international investors are placing on continued investment into Melbourne. As other major markets in the region re-open and vaccination rates surge locally, we are seeing both international and local groups placing more and more focus on the office sector as the return to the office effort builds momentum,” Mr Pillai said.

Vantage Property Investments Managing Director Matt Spring noted, “We are pleased to have produced an exceptional result for our private investor client. Vantage’s philosophy is to create income and value through the identification of quality buildings in excellent locations, with sound property fundamentals. Our hands on approach from beginning to end, provides a strong point of difference for our clients and investors when opportunities arise to transact.”

Legal advisors to HThree on the property acquisition were David Sinn and Julia Orbach from Herbert Smith Freehills. Advising on the property financing were Ken Nguyen and Sophie Ng from Ashurst.

Mr Sinn commented, “It was a great pleasure to work with HThree on its maiden acquisition in Australia. This investment by HThree continues to demonstrate the strength of the Australian commercial real estate market, despite the current COVID challenges, and the strong investment flows from Singaporean investors who have been one of the largest sources of foreign capital into Australia over the past 12 months.”

Mr Nguyen echoed those sentiments, stating, “Ashurst was delighted to act for HThree on its maiden transaction, which demonstrates the particular and continuing appeal of Australian commercial real estate as an asset class. We firmly believe in the continued importance of physical offices to the manner in which Australian businesses operate.”

Following on from the 446 Collins Street acquisition, HThree will continue to look for opportunities in the Australian office market within its investment mandate to grow its Australian portfolio.

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About Warwick P

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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