Estia founder Arvanitis exits Collins St as South Yarra beckons
Peter Arvanitis, the founder of listed aged care provider Estia Health, is ramping up his activity in the real estate market, selling a tower in Collins Street to an Indonesian investor for a tidy profit as he prepares to develop a new hotel in South Yarra.
The 18-storey tower at 520 Collins Street – famously once owned by disgraced tycoon George Herscu – was sold for $78 million on an initial yield of 4.5 per cent. Title deeds show the buyer is an Indonesian-born investor based in Western Australia.
Mr Arvanitis himself bought the building from Melbourne powerbroker Jason Yeap four years ago for about $50 million.
Since then he has refurbished and re-leased the building, improving the airconditioning and lifts.
In 2016, Mr Arvanitis resigned as a director of Estia and his entire stake in the company was sold after the aged care provider’s share price collapsed following profit downgrades and issues around debt.
His decision to cash out of Collins Street comes as he embarks on a new direction, striking a deal with global hotel giant Marriott to develop a new 180-room hotel in Claremont Street in South Yarra.
The Collins Street transaction, brokered by Colliers International’s Matt Stagg and Oliver Hay, is the latest in a run of off-market deals along the city’s premier business boulevard.
Mr Stagg said there was a “waiting list of qualified buyers” with mandates to acquire Collins Street properties.
Since September, four assets along the famous strip have traded in off-market deals, including the $140 million divestment by Singapore’s Fragrance of 555 Collins Street after struggling to make it work as a residential development.
“Collins Street is now the most coveted street in the Melbourne CBD amongst new-entrant offshore investors,” Mr Hay said.
Mr Arvanitis has been divesting elsewhere in his portfolio as well, selling last year the Maroondah Village Shopping Centre in Croydon North for $18.8 million and the Hillside Thoroughbred horse breeding farm at Nagambie north of Melbourne for $2.3 million.
The building at 520 Collins Street was previously bought by Mr Yeap, a businessman and philanthropist, in two stages in 2003 and 2004, for a combined price of $15 million.
Ten years before he snapped up the property himself, Mr Yeap had helped one of his clients to acquire the tower, originally known as Hooker House. After repeated efforts the building was sold by the receivers of Herscu’s collapsed property empire for $5.3 million in 1993.
