One of Melbourne’s most recognisable boutique office buildings, Swann House, is back on the market with its Chinese owners hoping to double their money in less than five years.
The 12-storey art deco-style building at 22 William Street, on the corner of Flinders Lane, was bought by developer Orion International Group for $21.6 million in August 2014 on a yield of 6.2 per cent. The developer renamed it Orion House.
Now, following a surge in commercial real estate values and rents in the Melbourne CBD (and helped by the building’s proximity to Cbus Property’s $1.2 billion Collins Arch project nearing completion) offers in excess of $45 million are expected.
Orion House offers 5700 square metres of lettable space and is being offered for sale almost fully leased with tenants that include its owner and Crikey publisher Private Media. Indian restaurant Shiraaz occupies the ground floor retail space.
The building is steeped in the history of Melbourne. The 826-square-metre corner site is where John Pascoe Fawkner, one of the city’s founders, built his first home in 1835, which later became the district’s first hotel.
Russell Meerkin, head of marketing and property management at Orion, said the owners had taken note of the “heat” in the market in deciding to put the property on the market.
“It’s an irreplaceable asset that’s 95 per cent leased up,” he said.
CBRE’s Mark Wizel, Josh Rutman and Lewis Tong in conjunction with Colliers International’s Daniel Wolman, Oliver Hay, David Sia and Matthew Stagg have been appointed to sell Orion House via an international expressions of interest campaign.
The agents pointed out there were very limited opportunities to acquire assets in the $40 million to $100 million price range, with only two such properties having come to market this year compared with six sold last year.
“Given the significant investor appetite for Melbourne office assets and the building’s prime corner position, we expect the sale campaign to generate considerable investor interest,” Mr Wizel said.
Mr Wolman added: “With recent interest rate cuts in the market and the expected growth of 2.75 per cent for the Australian economy over the next year, buyer confidence in the property market is the strongest we have ever seen.”
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