Domestic, offshore institutional investors compete for rare Cremorne office building
AXA Investment Managers has acquired a strategic Melbourne city fringe development site in Cremorne from Caydon Property Group for a development with an end value of over $100 million.
The transaction was structured on a land purchase price of $32.5 million and negotiated by Colliers International’s Trent Preece and Rob Joyes.
The purchaser, AXA Investment Managers, is a global investment manager with circa $100 billion in real estate under management and is the number one portfolio and asset manager in Europe. The developer and vendor, Caydon Property Group, is one of Australia’s leading private developers, having developed over $1 billion in completed projects.
“The proposed office building will form part of the exciting ‘Malt District’ development which will transform the iconic Nylex site into a vibrant mixed-use precinct integrating modern offices and apartments with refurbished heritage buildings, silos and generous public space,” Mr Preece said.
Stage 1 of the landmark development is due to commence construction this month and will comprise a new nine-level office building together with Coppins Corner, a mixed use 15 and 12 level apartment building. Stage 1 is due to be completed in 2020.
Stage 2 will include two residential buildings, a rooftop bar and restaurant under the iconic Nylex clock, a hotel set into the famous VB silo’s, office and retail space and a microbrewery, gastro pub and café set into unique heritage buildings.
Located just 3 kilometres south east of the Melbourne CBD on the bank of the Yarra River, the building will feature an impressive ground floor lobby, retail accommodation, podium car parking and five upper levels of office accommodation. The building will also include state of the art end of trip facilities, gymnasium and an expansive landscaped terrace to support employee lifestyle.
The upper office floors of the building have been fully pre-committed by MYOB, the accounting software giant listed on the Australian Stock Exchange, for 10 years. The office space will have a converted industrial feel and the building design maximises impressive views over the Yarra River, Botanic Gardens and Melbourne CBD. Colliers International also negotiated the pre-commitment on behalf of Caydon Property Group.
Mr Preece said Cremorne was one of the hottest office markets in the country, with major technology and creative tenants attracted by the high level of surrounding amenity, ease of access and public transport linkages.
“The precinct has experienced double digit rental growth per annum over the past two years and has one of the tightest vacancy rates of any major Australia office market,” he said.
“Offerings of this scale and quality are rarely seen outside the Melbourne CBD. The offering attracted a strong level of interest from targeted domestic and offshore institutional investors attracted by the thriving location, strong lease covenant and long weighted average lease expiry.”