A well-known office building on a prominent corner site in Melbourne’s St Kilda has hit the market, with price expectations of more than $60 million.
The striking seven-storey office building at 615 St Kilda Road, situated on the corner of St Kilda Road and Raleigh Street, is known to many as the former Tattersalls building and has been home to Cancer Council Victoria for the past 10 years.
Sitting on a substantial 3,501sqm in what’s known as Melbourne’s Alfred Health Precinct, the landholding is capable of major development in the future (subject to council approval).
The building comprises 8,532sqm of net lettable area, with highly flexible floor plates, a central service core that provides for several tenancy configurations, excellent light and views over Albert Park and Port Phillip Bay.
The asset is being taken to the market by Knight Frank’s Langton McHarg, Trent Preece and Paul Kempton in conjunction with JLL’s Josh Rutman, Tim Carr and MingXuan Li via an International Expressions of Interest campaign.
Mr McHarg said the asset was expected to be hotly contested, as it offered buyers the opportunity to capitalise on future growth to come within the tightly held precinct, where there is limited supply of assets available for sale.
“615 St Kilda Road is an excellent value-add opportunity for savvy investors looking to capitalise on the growth of the surrounding precinct, or for those seeking significant land holdings for future development,” he said.
“Dwindling supply of office accommodation in St Kilda Road and its relative rental value compared to other fringe markets all point to strong growth prospects for the precinct.
“With the very low number of opportunities for buyers to consider at this price point in 2022, we anticipate significant investor interest from domestic, interstate and overseas capital.”
Mr Rutman said: “St Kilda Road has evolved into a series of office sub-markets, with 615 St Kilda Road sitting squarely within the Alfred Health Precinct which has seen a great deal of interest and activity in recent years.
“As we continue to observe a ‘flight to quality’ within investment markets, this property presents all of the required fundamentals – a large corner landholding, reliable income stream and quality improvements which provide for several value-add and repositioning opportunities.”
Several interstate and overseas capital players continue to seek out opportunities in the precinct, with the sale of the neighbouring 607 St Kilda Road for $74.325 million setting a new pricing benchmark for capital values at over $10,000 per sqm on Net Lettable Area.
The St Kilda Road precinct continues to experience value growth which has been largely driven by significant supply withdrawals.
It is evolving due to major projects including the new Anzac Train Station – due for completion in 2025
– forming part of the $11 billion Metro Tunnel project, major new developments around Alfred Hospital and recent land transactions that will lead to future development.
The International Expressions of Interest campaign for 615 St Kilda Road, Melbourne closes on Wednesday 21st September 2022 at 2pm (AEST).