Strong sale kick starts activity in Melbourne’s metro office market for 2022
A local private investor has acquired a two-level, fully leased office building within one of Melbourne’s most recognised metropolitan business parks in the first major metropolitan office sale in 2022.
In a deal negotiated by Colliers’ Peter Bremner, Rachael Clohesy and Leon Ma, in conjunction with Raoul Salter of Gross Waddell ICR, BFX Family Office has purchased 16 Lakeside Drive in Burwood East for $13million on a 6.1% yield. The property was sold on behalf of Harbour Horizon No. 2 Pty Ltd, an investment vehicle of the Melbourne based Harbour Group.
“This is the first major metropolitan office transaction of note this year, and represents a healthy yield of 6.1% and a strong capital value rate of $5,620/sqm,” Mr Bremner said.
Situated within Tally Ho Business Park, around 18km east of the Melbourne CBD, the property is 100% leased to the Country Fire Authority (CFA), Everkeen Group and Cora Group at a net passing income of $798,998 per annum which provides a WALE of 2.3 years.
The 2,313.6sqm contemporary office occupies a substantial Commercial 1 zoned site of 4,867sqm.
“This property represented a quality investment opportunity that does not come along often in Melbourne’s metropolitan market,” Mr Bremner said. “It is difficult to find fully leased investments in the $10-$15million price range so we were not surprised that the campaign generated significant interest from a wide range of investors.”
16 Lakeside Drive comprises a contemporary two-level office building configured around a central core with one lift, which allows for efficient floor plate splits for multiple tenancies.
Extensive glazing to all four sides of the façade provides excellent natural light throughout the building. There is also ample parking with 110 car bays.
Mr Ma said the purchaser was a local investor with property interests in the surrounding area, who was looking at the Tally Ho asset as a landbanking opportunity.
“The property had strong appeal with its location and accessibility,” Mr Ma said. “It is well connected to transportation options including bus and tram services along Burwood Highway, Glen Waverley Train Station, Monash Freeway and Eastlink.
“Tally Ho Business Park is surrounded by picturesque parklands including East Burwood Reserve and Billabong Park, as well as beautiful lakes within the business park with walking trails for tenants to enjoy. Major nearby shopping centres which provide excellent amenity include Centro The Glen, Burwood One, Forest Hill Chase, Westfield Knox, Box Hill Central and Eastland Shopping Centre.
“All of this adds up to make the park a highly sought after corporate address, and rarely vacated.”
Other major tenants within the Tally Ho Business Park included VicRoads, Ambulance Victoria, World Vision, Pronto Software, The Salvation Army, ANZ, IAG Insurance, Emergency Services Telecommunications Authority (ESTA) and Motorola.
“Buyers are showing great faith in the metropolitan office market, and it was evident during the course of this campaign that they are overwhelmingly confident that occupiers are looking to grow within popular business park locations,” Mr Salter said.