Local investor purchases on 4.43% yield

A local investor has paid $23.1 million for a freestanding Collins Street property in Melbourne's CBD in an off-market transaction managed by Savills Directors Clinton Baxterand Nick Peden.

Mr Baxter said the sale of 406 Collins Street, located in the central CBD close to Queen Street, had been driven by the prestigious Collins Street address, strong tenancy profile including Telstra at ground level, outstanding condition of the building throughout, and numerous value-add opportunities available to the purchaser.

'Several local and Asia-based investors were extremely keen to purchase this property and, in a reversal of the recent trend in the market, it was a local investor who prevailed and secured the 12 level building.

'Investors recognise that strategic central CBD properties such as this are the best placed to benefit from the apartment and population boom currently occurring in central Melbourne, leading to greater retail spending and a growing local professional workforce throughout the city in coming years.

'Furthermore the recently announced $1.25 billion CBus mixed-use redevelopment of 447 Collins Street, only 80 metres from the property, provides a significant additional future benefit,' Mr Baxter said.

The 3,756 square metre office building sits on a 441 square metre site, zoned Capital City 1, with an extensive frontage to Collins Street.

The building was sold at a passing yield of 4.43% with the purchaser having the opportunity to significantly increase the income in the short-medium term.

Mr Baxter said pent-up demand for CBD properties in the $10 million to $50 million price bracket was quite pronounced with an enormous wave of capital from Asia endeavouring to secure prime properties throughout the Melbourne commercial market.

He said the market in 2016 was clearly off to a positive start with investors particularly focused on acquiring high quality assets in prime locations.

Savills plc issued this content on 05 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 05 February 2016 01:16:58 UTC

Original Document: http://www.savills.co.uk/_news/article/110560/142354-1/02/2016/prime-collins-st-building-trades-for-$23.1m