Two high quality, A-Grade Melbourne office investments on a large city land holding have changed hands for $150 million in the first major office transaction of 2022.

Colliers’ John Marasco, Anna Cavar, Oliver Hay and Adam Woodward, in conjunction with Mark Coster, Kiran Pillai, Scott McGlone and Stuart McCann of CBRE, have sold 1010 La Trobe Street, Melbourne and the adjacent Innovation Building on behalf of City Harbour and SF Australia Property Investment II GmbH managed by EURAMCO Asset Management (EURAMCO).

The properties, which represent a substantial underlying land area of 6,811sqm contained within two parcels, have been acquired by Straits Real Estate via locally based Artifex Property on a 5.07% passing yield.

1010 La Trobe Street and the Innovation Building are wholly contained in two separate allotments, while a separate car parking component is located in the podium of 1000 La Trobe Street. All three components were sold together, in-one-line.

The properties are situated within Melbourne’s City Harbour precinct, between the CBD and Melbourne’s waterfront.

“On offer was a unique opportunity to acquire a 100% interest in these two buildings which have large, functional floorplates, spectacular water views and unparalleled connectivity and amenity,” Ms Cavar said. “They are situated on an exceptionally large underlying land area in an established government precinct with an enviable tenancy profile.

“There is also potential to add value through tenant management and a curated capital expenditure program, offering the purchasers the opportunity to capture the rewards of investing in one of the CBD’s last growth areas. These sought after characteristics led to significant interest from a variety of potential purchasers, with Straits Real Estate and Artifex Property teaming up as the successful purchasers.”

1010 La Trobe Street is a nine-level office building incorporating a ground floor foyer, retail tenancy and a secure garage/storage area, together with eight upper levels of office accommodation.

The five-level Innovation Building incorporates a ground floor foyer and secure server rooms, together with four upper levels of office accommodation.  The car parking component for both buildings comprises 163 bays.

Head of Development at City Harbour, Guy Taylor, said: “The co-owners have held the assets together since 2007 after City Harbour completed development of the two buildings.  City Harbour welcomes Straits Real Estate and Artifex Property to the precinct and believes the proposed upgrade works and revitalisation of the assets by the purchaser will complement the significant future development plans by City Harbour for the precinct.”  

Ian Thorpe, Managing Director at EURAMCO, said: “It is clear there is still a strong market for high performing commercial assets  EURAMCO will seek further acquisitions of high performing commercial assets in Australian while winding down the existing 1010 and Innvoation trust.”

Mr Coster said the location offered every convenience of the city, with the added benefit of waterside views, all situated in one of Melbourne’s largest urban renewal corridors.

“1010 La Trobe Street and the Innovation Building will benefit from the immense government investment already committed to the adjacent Marvel Stadium precinct,” he said. “A new masterplan for the City Harbour precinct has been developed incorporating a Central Park, which will be an active centre, with large trees and paved paths connecting Harbour Esplanade and Digital Drive.

“The Victorian State Government has committed $225million to transform Marvel Stadium into one of the best sports and entertainment destinations in the world, and has offered to the market the opportunity to acquire a long-term lease over Docklands Studios Melbourne and development land fronting Docklands Drive with the vision to create a world-class and thriving media precinct.

“This is in addition to the investment in the West Gate Tunnel Project, which will create a vital direct city access from the western suburbs and an alternative to the Westgate Bridge.”

Mr Marasco said Melbourne remained a sought after destination for investment by all major groups.

“Melbourne is a gateway city to the Asia Pacific, home to more than 350 hotels, a world class biomedical precinct on the doorstep of the CBD, world-renowned universities and a highly educated workforce,” he said.

“Our city offers a high performing office market with a diverse tenant base, strong historic population growth and record Government investment in infrastructure. Melbourne is poised for an accelerated recovery upon opening of international borders.

“These properties were marketed for sale in 2021 and attracted interest from a variety of capital sources including domestic private funds and offshore instituions. Through the process, Straits Real Estate emerged as the successful buyer, aided by the local expertise of Artifex Property who were able to navigate through the transaction during Melbourne’s Covid restrictions.”

To request a sales analysis please contact the selling agents via the below contact details.