Singaporean City Developments Limited (CDL) and its co-investor HThree City Australia have bought an A-grade office tower in Melbourne’s CBD from an AMP Capital separate account for $236 million.
The 18-storey tower at 330 Collins Street was positioned at the intersection of Collins Street and Elizabeth Street in the heart of the city’s CBD.
The asset, which offered 18,000 sqm of net lettable area, comprised 17 floors of tenanted office space, ground floor and basement retail space, and 43 basement car bays.
The property was about 90% occupied with a diversified tenant portfolio. It also had a 4.5-star NABERS energy rating and 5-star NABERS water certification.
The deal was HThree’s second acquisition in Australia, following its maiden acquisition of 446 Collins Street in 2021.
“We believe that Melbourne’s CBD will continue to bounce back strongly, and that 330 Collins Street is well placed to benefit from the increasing demand for well-located, quality office space,” HThree CEO Kevin Kang said.
CDL Group CEO Sherman Kwek said the joint acquisition of such a rare trophy asset at the heart of the Melbourne CBD marked their expansion into the Australian office sector and complemented their focus on strengthening their recurring income.
“On the back of strong economic fundamentals, Australia’s office market is poised for recovery and 330 Collins Street presents a significant opportunity to unlock value,” Kwek said.
Cushman & Wakefield’s Mark Hansen, Leigh Melbourne, Nick Rathgeber and Josh Cullen brokered the deal with CBRE’s Mark Coster, Kiran Pillai, and Scott McGlone.
The deal comes after Singapore-listed CapitaLand Investment bought the 22-storey office tower at 120 Spencer Street in Melbourne’s CBD last month.
Recent Melbourne office deals include Growthpoint Properties’ purchase of a government-leased office building in Dandenong for $165 million last month.
Frasers Logistics & Commercial Trust bought an office building in Mount Waverley for $60.25 million last month, while Garda Property Group acquired an office in Hawthorn East for $20.1 million.
In February, Singapore-listed Straits Trading Company bought two office buildings in Docklands for $150 million, while Hong Kong-listed Link REIT entered into a $596 million deal with Oxford Properties to invest in an office portfolio including the 567 Collins Street building in the Melbourne CBD.
Office deals across Australia reached $3.4 billion during the first quarter of 2022, down 18% on the same period a year ago, according to Real Capital Analytics.
However, office transactions reached $24.8 billion over the 12 months to end-March 2022, up 63% year-on-year.
