Vantage Property investments have announced the acquisition of 574 St Kilda Rd for $58m as it looks to repeats its recent performance at 420 St Kilda Rd.
The 7,742sqm building at 574 St Kilda Rd is currently 35% vacant and Vantage intend to refurbish to include a new foyer, complete lift upgrade, as well as on-floor lobby and amenity refurbishments. Once complete, the Vantage will be targeting a 6.1% fully-let yield.
The vendor, SHL Nominees & part of the Lederman family, acquired the building for $24 million in 1990.
The acquisition follows Vantage recent sale of 420 St Kilda Road for $98 million to the Mars Family Holdings on a yield of just 4.8%. Vantage had acquired that asset 2 years earlier for $68 million and proceeded with a refurbishment program.
Other major sales in the area include SC Capital's acquisition of 412 St Kilda Rd for $104m in October and Marprop's acquisition of 541 St Kilda Rd for $65m in late 2018.
According to Knight Frank, tight office vacancy in central and fringe Melbourne, coupled with an increasing desire from tenants to be located centrally, has seen record rental growth being recorded along St Kilda Road with prime net face rents up 14.3% in the 12 months to July 2019 to average $440/sqm, while secondary net face rents grew by 13.8% to average $330/sqm.
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