An eight-storey office building at 170 Queen Street, Melbourne, has sold for close to $30m.

Deal flow as investors look well ahead for growth

Nicole Lindsay|Apr 14, 2021

Investors and developers are returning to the CBD property market with two transactions inked in the past week, worth around $70 million.

Buyers are looking beyond the COVID-19 anxiety about workers returning to the office to a future with limited space options.

A 10-level office building at 422 Little Collins Street is understood to have sold for more than $40 million with records showing a caveat placed on the property by Melbourne investor, CNGAUS, owned by Charles Ng.

That deal was brokered by Colliers International agents Daniel Wolman, Oliver Hay and Matt Stagg who declined to comment.

Caveats on another property at 170 Queen Street show developer Holder East has bought the property from Down Ampney, a syndicate controlled by a Jersey-based trust Daisy Hill Real Estate, with associations with the Baillieu family.

Both caveats were lodged by Thomson Geer lawyer Eu Ming Lim who declined to comment about the deals.

That 11-storey tower, known as CPA House, is understood to have sold for close to $30 million by the Colliers team, including Leon Ma.

Daisy Hill paid $6.75 million for the 2819 sq m property in 2001. Built in 1955, it sits on a 542 sq m parcel of land near Little Bourke Street.

The 5954 sq m Little Collins Street building was built in 1990 as the RACV’s administrative office and sits on a large 956 sq m site between Queen and William streets.

The deals follow hot on the heels of the $40 million sale of 411 Collins Street and 100 Franklin Street for nearly $30 million and there are more to come.

JLL is expecting as much as $80 million for Salta’s 63 Exhibition Street site and Colliers is also marketing the 14,000 sq m Flinders Street office building occupied by Victoria University since the 1990s which is carrying a $90 million price tag.

The university is moving in October 2022 to purpose-built space 364-378 Little Lonsdale Street.

Mr Stagg said: “Investors are looking 18 months-two years down the track. Before COVID-19, the CBD vacancy rate was 3.5 per cent and the market was very very strong. But now projects have been paused which means in 2022-23 the office market will be tight again.”

“The weight of money in the market is extraordinary, particularly from local private and international investors,” he said.

It’s even finding its way to the regions. Records show IP Generation’s Chris Lock has put a caveat on Vicinity’s Mildura Central shopping centre.

Colliers agent Lachlan MacGillivray sold the property for the Vicinity Enhanced Retail Fund for $81.1 million but declined to comment further.

Mr MacGillivray also sold the 20,449 sq m centre in 2014 to Novion (which merged with Federation to become Vicinity) for $109 million. Target has not renewed its option on space in the busy sub-regional centre which eroded a chunk of its value.