The first long-leased government office in Melbourne to be offered to the market in 30 years is expected to generate strong investor interest during a sale campaign.
The quality modern 8-level A-Grade office building at 165 – 169 Thomas Street in Dandenong, which has total net lettable area of 15,070sqm on a large 2,502sq m site, was recently built for the Victorian State Government in 2011.
The asset has a long WALE of 10 years by income, with the current lease to the State Government’s Finance Department in place until 2032, and a strong probability of renewal. The rent is increased annually by 3.50%.
The asset is now being taken to the market by the vendor, the Grollo Family, via an International Expressions of Interest campaign run by Paul Kempton and Trent Preece of Knight Frank, with price expectations of over $170 million.
Mr Kempton said the strong tenant covenant would be one of the biggest drawcards for investors, with interest expected from major domestic and offshore institutional buyers along with local based syndicators “This is the first government long-leased office investment in Melbourne to be offered to the market in 30 years,” he said. “This investment offering is incredibly rare and will be highly sought after.
“The security of the lease to the Victorian State Government, which will run for at least another 10 years, will attract buyers, but beyond that there is certainty in the office market, with Dandenong having one of the lowest office vacancy rates in Melbourne as tenants increasingly move to non-CBD locations.”
Mr Preece said Dandenong was the capital of Melbourne’s south-east and was benefitting from the Revitalising Central Dandenong (RCD) initiative, a State Government-initiated project with $2 billion of private and government investment.
“This property allows investors to secure a rare 100 per cent freehold interest in a premium investment offering in a well-established Melbourne office market that has major growth occurring via significant surrounding investment,” he said.
GSO Dandenong has 204 car parking bays and high environmental sustainability credentials including a 5.5 Star NABERS Energy rating, a 6.0 Star NABERS Water rating and a 6.0 Star Green Star rating.
The International Expressions of Interest (EOI) campaign for the property will close on Wednesday 30 March at 2pm (AEDT).
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