CFMEU cashes in on property boom, selling Swanston Street head office for $26m
The Victorian arm of the powerful building union has temporarily swapped hard-hats and hi-vis vests for slide-rules and “sold” stickers, selling its Carlton headquarters to a South African student accommodation developer for about $26 million.
The Construction, Forestry, Mining and Energy Union has sold its long-standing home at 500 Swanston Street, just outside the CBD, in a transaction struck at a price of about $19,000 square metre.
The buyer is Johannesburg-listed powerhouse Redefine Properties, which is expected to pursue a student accommodation project on the site.
It is the second property Redefine has purchased in the Carlton area. Last year it spent $30 million for a car park on Leicester Street that they also hope to redevelop into student housing.
Redefine is well known in the Australian market, where it is a major shareholder in Brisbane’s Cromwell, which is pursuing a takeover of Investa Office Fund.
A student housing boom is gathering pace in the neighbourhood. Opposite the union headquarters is the former CUB brewery site, which private developer Grocon once controlled before developing part of it and selling the remainder, including to student accommodation provider Scape Student Living.
Backed by global funds, Scape is active around Swanston Street, with a portfolio pipeline of close to $1 billion, including what is slated to become the world’s tallest student digs overlooking RMIT University.
CBRE agents Josh Rutman, Mark Wizel and Kiran Pillai were appointed to sell the CFMEU building. Sutherland Farrelly’s Paul Farrelly represented the CFMEU.
Short-term leaseback
“We’re seeing a combination of interest from owner-occupiers, investors as well as developers in the residential and student accommodation space,” Mr Rutman said, while declining to comment on details of the transaction.
“That is seeing building prices go to pretty high levels.”
The building union is expected to take up a short-term leaseback at the two-storey Swanston Street building before moving to its new home on Elizabeth Street.
Despite copping a series of heavy fines and penalties over its industrial actions, including a whopping $3.55 million in damages to Grocon over the bitter Emporium Melbourne dispute two years ago, the union has proven to be an adroit participant in Melbourne’s surging commercial real estate market.
In December last year, the CFMEU swooped on two adjoining properties at 532 and 540 Elizabeth Street in a $30 million deal.
The 10-level building was owned and occupied by the Victorian branch of the Australian Nursing and Midwifery Federation.
“The CFMEU Victorian branch has purchased a new property to meet the needs of our growing membership,” state secretary John Setka said at the time. It has been a case of musical chairs on the northern edge of the CBD for two of the state’s biggest unions.
The nurses are also expanding and will use proceeds from the sale to the CFMEU to help fund their new head office directly opposite their current home.
The 10-level facility, due to be completed later this year, includes an auditorium and educational facility to cater to the federation’s members.
