Asian buyers target Melbourne in $257m spree

Foreign investors are buying about 25 per cent of commercial properties offered in Melbourne’s CBD, a record level, Savills Australia maintains.

Two Singapore-listed companies have splashed out a combined $226.1 million over the past month to buy four Melbourne properties and a Hong Kong-based private investor has bought an office block for $31.5 million.

Victoria University announced on Monday that it had sold its 12-level office building at 300 Flinders Street to the Singapore exchange-listed Hotel Grand Central group for $48.5 million.

The Flinders Street sale follows an unprecedented buying spree by another Singapore development company, Hiap Hoe, which snapped up three prime Melbourne sites over two months for a total of $177.6 million.

It also follows another Hong Kong-based investor announcing on Monday the purchase of Taylors House at 399 Lonsdale Street for $31.5 million.

The 10-level building is leased to Taylors Institute of Advanced Studies and was sold by listed Australian group FKP in an off-market transaction negotiated by Teska & Carson’s Adrian Boutsakis.

Savills’ directors Clinton Baxter and Nick Peden said the strata property at 300 Flinders Street attracted a yield of 8.3 per cent with most of the interest coming from offshore investors, particularly Singaporean and Malaysian firms.

”The sale … is a further demonstration of the exceptionally strong offshore buyer demand for high-quality CBD investment assets,” Mr Peden said.

The Flinders Street property was purchased with an existing seven-year lease held by Victoria University, which pays $4,032,000 a year with a fixed 3.5 per cent per annum increase, Hotel Grand Central told the Singapore exchange.

”The proposed acquisition will enable HGC to diversify its investments in Australia to the commercial market,” the company said.

Two years ago Victoria University offloaded the car park component of the same building for $28.2 million. It purchased the property from mortgagees in 1993 for $15.9 million.

Hiap Hoe’s first foray into Melbourne property came early last month in a series of deals negotiated by CBRE, Savills and Jones Lang LaSalle when it bought a development site from MAB Corporation for $28.8 million.

That was quickly followed by the purchase of 380 Lonsdale Street, a commercial car park, office and retail complex, for $43.8 million.

Last week Hiap Hoe made three in a row, snapping up mixed-use retail and office at 206 Bourke Street for $105 million.

Recent Asian purchases include:

6-22 Pearl River Road, Docklands, $28.8 million.

380 Lonsdale Street, Melbourne, $43.8 million.

206 Bourke Street, Melbourne, $105 million.

300 Flinders Street, Melbourne, $48.5 million.

99 Lonsdale Street, Melbourne, $31.5 million.

The original release of this article first appeared on the website of Hangzhou Night Net.

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