Brendan Sullivan picks up St Kilda Road tower for $18m

Originally built by trucking magnate Lindsay Fox as offices for Linfox, the office tower was offered for sale by Sydney-based DJSK Pty Ltd, which bought it for $13.6 million in October 2017 from tech entrepreneur Malcolm Freake.

While property values and rents have risen sharply on St Kilda Road due to tightening vacancy rates, Mr Sullivan told The Australian Financial Review he had bought well at just over $7100 per square metre.

“It is inevitable that $10,000 per square metre will be the new norm all over Melbourne shortly,” he said.

He said his plans were to undertake minor refurbishments of the building and lease it out.

He added that 1 Bowen Crescent would complement his existing holdings in the area.

Christopher Ashjian, who represented the vendors – a mix of “local and international people” – said they were pleased with the result achieved.

Company records list the directors of DJSK Pty Ltd as Sydney-based Barry Spinks and Jersey-based David Fox.

For Mr Sullivan, the acquisition followed Sullivan Property selling an East Melbourne office building for about $40 million in April and a Melbourne CBD bagel shop for $2.6 million.

St Kilda Road heats up

Selling agents Josh Rutman, Mark Wizel, Lewis Tong and Scott Orchard from CBRE said the sale typified the rapid capital growth seen in the St Kilda Road office market.

“Vacant building sales are the purest test of investor confidence in a market, especially given the amount of equity required for such a transaction,” Mr Rutman said.

“Despite some concerns about the impact of the disruptions from the construction of the new train station, the result is another example of great investor confidence for the St Kilda Road precinct, which is enjoying a resurgence towards office use after years of reversion to residential.”

The 1 Bowen Crescent property is just around the corner from where Malaysia’s UEM Sunrise abandoned a poorly selling Zaha Hadid-designed apartment project at 412 St Kilda Road and sold the office building – the former Victorian Police headquarters – to Singapore-based SC Capital for about $108 million.

Mr Tong said several major St Kilda Road residential projects on the site of old office buildings have been reoriented back towards commercial use in response to current market conditions.

“With minimal office stock on the market in the Melbourne CBD, there has been a gravitational pull towards St Kilda Road, with many Asian groups seeing the precinct as a strong prospect for their investment capital, especially given the recent positive statistics for net effective rental growth,” he said.