Core Melbourne CBD Office Tower coming up for sale

9 March 2023

A major CBD office tower at 628 Bourke Street in Melbourne will hit the market next week.

The Swiss owner AFIAA has exclusively appointed Knight Frank agents Trent Preece, Ben Schubert, Justin Bond and Neil Brookes to handle the sale via an International Expressions of Interest campaign.

The superbly refurbished A-Grade office building offers 24,127sqm of net lettable area and has achieved strong ESG credentials including a 5.0 Star NABERS Energy rating and 5.5 Star NABERS Water rating.

The tower was originally constructed in 1989 and was recently extensively refurbished with almost $35m invested including a new ground floor lobby and retail activation, state of the art end-of-trip facilities, full lift upgrade and expansive recreational deck including outdoor terrace and tennis court.

The building is 90% per cent leased to majority government and listed corporations including CPB Contractors (occupying 49.2 per cent), Academies Australia Polytechnic (13.0 per cent), NTT Data (5.4 per cent), V/Line (5.3 per cent) and Kinetic IT (5.3 per cent), and has a WALE of 2.0 years.

The tower sites on a large 3,301sqm CBD site with four street frontages offering substantial long-term redevelopment potential the order of 60,000-70,000sqm GFA.

Mr Preece said opportunities to acquire a core located Melbourne CBD office tower of this quality and scale are incredibly rare.

“The asset will be highly sought after by domestic and offshore buyers given the prime location on the prestigious Bourke Street only 150 metres from Southern Cross Train Station.

“Investors will be attracted by the significant recent investment in the building, positioning the asset to capitalise on flight-to-quality trends and significant rental reversions upon lease expiries.

“Furthermore, buyers will be buoyed by the strong fundamentals. At a time when institutional-grade Melbourne CBD assets continue to be tightly held, 628 Bourke Street provides the dual benefit of a strong underlying income profile combined with unimaginable future development potential.

“Melbourne continues to be highly sought after by global capital on the back of record infrastructure investment, high population growth and robust economy.

“Melbourne has already overtaken Sydney as the largest office market in Australia and its population is forecast to overtake Sydney late in the decade.

“Following the significant recent jump in the return to office numbers with occupancy rates now in line with the Sydney CBD, investors are strongly focused back on the Melbourne CBD.”