Singapore-listed property group Roxy-Pacific has replenished its Victorian holdings with a $33 million acquisition of the commercial building, Melbourne House, at 360 Little Bourke Street.
The 4504 square metre freehold building with a 937sq m site has been purchased for future redevelopment.
The company said the property, which has two street frontages to Little Bourke Street and White Hart Lane, would be redeveloped into a mixed use development, comprising a hotel and retail space.
It is understood the developer and investor has little appetite for residential development at this stage.
Melbourne has borne the brunt of an apartment oversupply scare in recent months, but with strong population growth – faster than Sydney – the Victorian city looks likely to have enough demand to absorb the large number of apartments built in the past few years.
Tourism, however, is rising and the number of hotel rooms are insufficient in both Sydney and Melbourne prompting property groups to look to hotel development opportunities.
Located at the vibrant Elizabeth Street intersection, close to the GPO and Bourke Street Mall, the six-storey building Melbourne House will benefit from ground floor retail activation. Additional levels can also be built, subject to council approval.
Until that happens, Roxy-Pacific will have holding income from two short-term leases to Leo Cussen Centre of Law and retailer Paddy Pallin.
Certified 9B, the building can also be leased to education businesses.
The Melbourne purchase for Roxy-Pacific comes after its two back-to-back commercial building purchases in Auckland, New Zealand.
While Melbourne’s acquisition was for development, Auckland’s two towers the A-grade office building at 205 Queen Street and the NZI Centre at 1 Fanshawe Street were part of a diversification and yield maximising strategy.
Colliers International’s Matthew Stagg and Trent Hobart brokered the sale of Melbourne House.
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