JLL Office Investments has successfully facilitated the sale of 432 St  Kilda Road, Melbourne, to Marwood Property Group. 

The private family firm will execute a staged refurbishment and leasing strategy with approval for the works  already secured for early 2025. 

The deal was brokered by JLL’s Josh Rutman, Tim Carr and Piper Dedrick. The transaction was free of  conditions and was settled within five days of the exchange of unconditional contracts.  

The 9,128sqm office building, positioned on St Kilda Road, which has one of the country’s highest vacancy  rates, attracted significant interest from private investors, residential developers and partial owner-occupiers,  including office and medical companies.  

Despite the challenges with the asset, being a 69 per cent vacant building with a short remaining WALE of  0.3 years, the building presented several opportunities for multiple purchasing cohorts.

This demonstrates a  surge in optimism along St Kilda Road, largely driven by the forthcoming Anzac Train Station and several  new infrastructure projects, which are expected to significantly enhance the precinct's amenities. 

“This landmark sale highlights the compelling opportunities within in the Melbourne office market for those  willing to look beyond the current challenges facing the sector,” said Mr Rutman, Head of Capital Markets – Victoria. 

“St Kilda Road’s challenges are well-documented; however, this precinct remains one of the most liquid  markets in the country. In Q4 2024 alone, nearly $100 million worth of assets changed hands, contributing to  approximately $730 million in completed sales since 2021.” 

Mr Rutman said buyers continue to see value in securing holdings with quality fundamentals that are well  positioned for future growth.  

“The mixed-use precinct continues to evolve, attracting capital from interstate and offshore.  

"We've seen average annual transaction volumes since 2020 hover in the $100 to 150 million range for St  Kilda Rd, so it's a clear sign of renewed appetite to see around $100 million of assets change hands in 2024.  

“We expect this trend to continue into the early part of the new year with other assets in the precinct close to  trading,” Mr Rutman said. 

Tim Carr, Associate Director, Office Investments, highlighted that this transaction exemplifies the market's  growing trend toward countercyclical investments in Melbourne, driven by the compelling returns exceeding  15 per cent available from day one. 

“In the final two months of the year, we saw three major transactions in the city fringe that accounted for  close to $120 million in sales volume, with an additional $200 million approximately under exclusive  negotiations.

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