A government occupied office building in Footscray has been listed for sale, representing one of the few leased investment opportunities this year in Melbourne’s metropolitan office market.
CBRE’s Capital Markets Office team of Scott Orchard and Tom Ryan, in conjunction with Colliers’ Rob Joyes, Thomas Blencowe and Anna Cavar, have been appointed to manage the sale process for the ‘Quay West’ building on behalf of the private family owner.
The 71 Moreland Street property is leased by the Victorian State Government and is occupied by the Department of Families, Fairness and Housing.
The three-level building has a net lettable office area of 6,144sqm, an on-site café and basement parking for 118 cars. It occupies 4,140sqm of land with corner frontage on Footscray‘s Maribyrnong Riverfront.
CBRE’s Mr Orchard said, “This is a compelling investment opportunity following a recent five-year lease renewal, which provides stabilised income security akin to a government bond. With no further lease option there is also significant rent reversion as well as future development potential, given the building occupies an underutilised Activity Centre Zone site just 4km from the Melbourne CBD.”
The property currently generates an approximate net income of $2.4m with 3.5% annual increases. It won a sustainability award recognising the buildings’ performance upgrades due to the installation of a 100 kWh solar array system aligning with the Victorian Government’s emission reduction targets.
“The owners have been very pro-active from a maintenance and capital expenditure perspective. Among the modern enhancements has been a focus on environmental and sustainability features, which is reflected in the 5.5 star NABERS Energy rating and a clear and confirmed pathway to 6 stars,” Mr Orchard noted.
The property also offers dual entrances with large, regular shape floor plates and a central lift core providing flexibility for different tenancy configurations, 360-degree natural light and views of the immediate parkland, Maribyrnong River and the CBD.
Colliers’ Mr Blencowe said, “It’s an exciting asset to take to market with no similar offerings available, with domestic and offshore buyers continuing to hunt for assets offering quality fundamentals. 71 Moreland is a trophy asset given its superior tenant covenant, repurpose potential and gateway location to one of Melbourne’s fastest growing and gentrifying fringe suburbs.”
Mr Blencowe noted that Footscray was home to over $30b of committed government spending with significant state health and transport infrastructure through the new Footscray hospital, rail upgrades and Westgate tunnel project. As well as other drawcards like Victoria University, a thriving hospitality scene and the busiest train station in metro Melbourne all situated near ‘Quay West’.
“This significant State Government and private sector investment is providing generational improvement securing the area’s future vitality, residential and commercial market demand, and entrenching Footscray as the hub for Melbourne’s booming western region,” Mr Blencowe added.
The Expressions of Interest sale campaign closes Thursday 15th June at 2pm with expectations of buyer interest over $37,000,000.