Developer Hengyi has listed for sale the 2-6 Southampton Crescent property and a series of neighbouring warehouses – dubbed the Abbotsford Collection.

Originally built in 1928 for Kodak, the key offering is a distinctive curved office building which provides more than 6,000 square metres of space over five levels.

It is being touted as an ideal office refurbishment opportunity to cater for ongoing tenant demand in Melbourne’s city fringe market. 

The offering also includes a series of warehouse buildings at 36 Bond Street and 27-29 Duke Street.

At a glance:

• Office building and neighbouring warehouses in prime Melbourne CBD fringe location now for sale
• The key offering is a distinctive curved office building which provides more than 6,000 square metres of space over five levels.
• Also for sale are a series of warehouse buildings at 36 Bond Street and 27-29 Duke Street with the combined assets occupying more than 3,000 square metres of land 

The assets have been listed for sale through CBRE’s Melbourne Middle Markets team of Lewis Tong, Mark Wizel, Josh Rutman and Scott Orchard in conjunction with Paul Burns and James Lockwood of Fitzroys.

Combined, the assets occupy more than 3,000 square metres of land opposite CUB’s Yarra River brewery, which recently changed hands to Japanese group Asahi as part of the recent $16 billion CUB takeover. 

The listing of Hengyi’s property follows the nearby sales of 45 & 50 Grosvenor Street and 36 Grosvenor Street – both to mainland Chinese investor interests for $37 million and $17 million respectively – as well as a major carpark transaction next door by Forza Capital for $12 million in April.

Other developers like Salta, Hamton and Icon have also completed major residential and mixed-use developments in the immediate area.

“It’s no coincidence that some of the most experienced players in the market have already allocated significant capital to properties in Abbotsford in light of the area’s growth prospects,” Rutman said.

“As such, we expect wide ranging interest in the Hengyi listing from both investors and owner occupiers, underpinned by the site’s strategic location and value-add potential.”

Fitzroys’ Mr Burns said that office vacancies across Melbourne’s city fringe markets had tightened to historic lows, which was driving interest in Abbotsford as the next near city hotspot for commercial activity.

“Tenants occupying older style offices in the surrounding area are increasingly seeking alternative accommodation as these buildings make way for new developments,” Burns said.

“These tenants are generally reluctant to move further away from the CBD and are preferring to relocate to affordable CBD fringe suburbs like Abbotsford.”

The Hengyi listing follows a flurry of recent activity in Melbourne’s sub $100 million market, with $400 million in sales negotiated in the past eight weeks, underpinned by rising interest in metropolitan assets.

“A shortage of opportunities has led to heightened competition from private investors and smaller unlisted funds when sub $100 million assets are listed for sale,” Rutman said.

“Investors have also become increasingly comfortable with metropolitan office investments as the risk premium versus the Melbourne CBD continues to narrow, underpinned by strong tenant demand and effective rental growth.”

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