A building in Melbourne’s southeast that was purpose-built for the long-standing tenant, the Family Court of Australia, has sold in an off-market deal.
The property at 53-55 Robinson Street in Dandenong, which consists of a fully refurbished, modern three-level building with 2,729sq m of net lettable area and a basement car park on a 2,371sq m site, was purchased by a local investor at a yield of 6.4%.
The off-market sale was negotiated by Knight Frank agents Tom Ryan, Nick Bisset and Paul Lillis in conjunction with Lachlan Devine of Charter Keck Cramer as acquisition manager.
The property, which was built in 1983, occupies a high-profile site in Dandenong with dual street frontage to Robinson Street and Rodd Street of 50.78 metres.
A 10-year lease is in place for the tenant, the Australian Government’s Family Law Court, that runs until February 2034, plus two three-year options.
The Family Law Court in Dandenong is one of only two family law courts in Victoria and the sole court located outside the Melbourne CBD. These courts offer comprehensive family services for Melbourne’s eastern regions and the broader state of Victoria.
The Robinson Street asset was sold at a cap rate of 6.45% and a net income of $1,122,602 per annum excluding GST, with a rare triple net lease in place.
Mr Ryan said: “With a new 10-year lease in place to the Federal Government, the purchaser was attracted to the long-term security offered by the Family Law Courts — a long-standing tenant.
“The property is fully leased by the Australian Government, which boasts a AAA credit rating from Standard & Poor’s and Moody’s—the highest possible investment grade rating.
“Confidence was further reinforced by the tenant’s current refurbishment programme, highlighting their ongoing commitment to the property.”
The Dandenong asset is currently undergoing a significant $6 million refurbishment, upgrading to A-Grade services and ultimately future proofing the building and tenant’s long tenure.
Recent works also include significantly improving the sustainability of the building, including the installation of 200 solar panels, generating 96kw of solar power. The asset has a targeted 5-star green rating and 5-star NABERS rating.
Mr Bisset said: “Investment opportunities featuring such a highly sought-after covenant are exceptionally rare.
“Even rarer are opportunities situated within a genuine mixed-use government hub in a rapidly growing micro-city like Dandenong.
“This premium building at 53-55 Robinson Street is strategically situated in the heart of Dandenong’s CBD and specifically the Government, Financial and Legal precinct, with easy and close access to amenity and major arterials.
“Not only will this bolster the long tenure of the existing tenant, but it also underpins the strong underlying land value.”
The Dandenong asset is located within the City of Greater Dandenong Planning Scheme and is within a Comprehensive Development Zone — Schedule 2 (CDZ2), meaning it also has significant future development potential.
Dandenong, situated 29 kilometres southeast of the Melbourne CBD, is a major Metropolitan Activity Centre and Victoria’s second largest retail and commercial hub, undergoing significant public and private investment.
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