A premium office building on Melbourne’s illustrious boulevard, St Kilda Road, is being brought to market for sale, as buyer confidence returns to the Australian commercial real estate sector.
The A-Grade office tower at 420 St Kilda Road, known for its distinctive reflective glass façade, comprises 10,435sq m of net lettable area across 11 levels with 131 basement and at-grade carparks.
The property is being offered for sale via an International Expressions of Interest campaign by Trent Preece, Tom Ryan and Alice Crowley of Knight Frank, together with Tim Carr, Mingxuan Li and Josh Rutman of JLL.
Strategically positioned on the corner of St Kilda Road and Kings Way, the property is located only 300 metres from the soon-to-open Anzac train station. The building is over 80% leased, with a WALE of circa 2.5 years and a fully leased net passing income of almost $6 million.
Mr Preece of Knight Frank noted that while the asset was previously marketed in 2023 amid heightened economic uncertainty, improved conditions have significantly shifted buyer sentiment.
“With inflation now under control and a positive interest rate outlook, we are seeing increased buyer depth and appetite,” he said.
“The listing of 420 St Kilda Road follows the recent sale of 468 St Kilda Road — the largest office transaction in Melbourne so far this year, and the first major investment sale along St Kilda Road in over three years, signalling renewed investor confidence.
“420 St Kilda Road is widely regarded as one of the best office buildings in the precinct given its premier location, proximity to the new train station, attractive façade and light-filled flexible floor plates with three sides of natural light.”
Mr Ryan of Knight Frank also noted that the building ticks all the boxes for investors, with high occupancy, diversified cash flow, extensive refurbishment with low capital expenditure requirements and strong history of outperforming nearby office assets.
“The completion of Anzac Station will be a game-changer for the area, delivering St Kilda Road its first direct rail connection which will transport over 39,000 people each day and enhance the potential for rental and capital value growth within the precinct,” he said.
Mr Carr of JLL highlighted the building’s recent leasing success, attributing it to the building’s strong fundamentals including the supreme quality of the recently completed refurbishment, ideal floorplate size of approximately 1,000sq m that subdivides easily to accommodate all tenant requirements and the building’s commanding corner location.
“We’re seeing tenants actively upgrading within the precinct and are gravitating toward buildings like 420 St Kilda Road that offer superior office accommodation within immediate proximity to the new train station,” he said.
“It is also the only office building along St Kilda Road with floor-to-ceiling curtain wall windows, offering abundant natural light and spectacular view lines to Albert Park, Royal Botanic Gardens and the tree line vista along the boulevard.
“Additionally, the property is significantly enhanced with a major underlying Commercial 1 zoned landholding of 2,288sq m, which supports future redevelopment of up to 65 metres, the addition of light weight floors above the existing roofline and future change of use to suit residential and mixed- use projects (subject to council approval).
Mingxuan Li from JLL also highlighted that 420 St Kilda Road is poised to attract Asian capital, including local, interstate, and offshore investors.
“The office market has reemerged as a focal point for Asian investors,” he said. “Asian capital views the current cycle as an opportune time to re-enter before the office sector inevitably recovers. This buyer cohort typically maintain a long-term perspective on real estate, often willing to hold assets for extended periods before considering future redevelopment. In 2024, two prominent Asian developers, Gamuda Land and Sunnyland Investment Development Group, commenced construction of their new projects along St Kilda Road, underscoring the area’s appeal to international investors.”
The Expressions of Interest campaign for the property will close on Thursday 29th May 2025.
Related Articles
