Prominent businessman and Crown Resorts director Harold Mitchell has collected a $49 million from the sale of his former South Melbourne headquarters.
Always a keen sage in the media and advertising markets, Mr Mitchell has proven himself to be just as canny in the commercial property game.
Contrary to conventional wisdom, Mr Mitchell put his own balance sheet to work for his office accommodation.
Known as Emerald House, the property at 105 York Street in South Melbourne was built in 2010 for Mr Mitchell’s media company, Mitchell Communications Group.
Mr Mitchell sold the business he founded in 1976 to global player Dentsu Aegis eight years ago.
The Japanese-owned firm remains the tenant of the 5100-square-metre building until the middle of 2021, but its famous landlord finally opted to sell and has bagged a windfall on the way out of the door.
The property sold to a local private investor on a yield just above 5 per cent, an extremely tight return for a property with only a few years left on the lease. The deal has also set a record rate building rate in the South Melbourne market of more than $9600 per sq m.
It was brokered by CBRE’s Mark Wizel, Kiran Pillai, Josh Rutman and Lewis Tong with JACX Property director Michael Jackson as transaction manager.
“Despite recent similar sales seeing a major uplift in values, this latest transaction now marks a new pricing record,” Mr Wizel said.
When he put the property on the market in June Mr Mitchell said it was the right the time to sell but acknowledged it was a decision not without emotion.
“I built it. It’s a fabulous building,” Mr Mitchell told The Australian Financial Review at the time.
“We built up to be the No.1 advertising business. We beat everyone in the world and we did it all from South Melbourne.
“I’m 76. It’s not much use as they carry me out to the grave and I say ‘Hang on, I’ve got this building’.”
Mr Mitchell dropped off the Financial Review Rich List this year and was quick to reject any suggestion a sale in South Melbourne might return him to the famous list.
“I hope not. I’m happy to just quietly disappear,” he said in June.