Agents expect Lonsdale St asset to attract keen interest with development potential
A substantial freehold property in the centre of the Melbourne CBD is expected to sell for circa $40 million after being listed for private sale.
Colliers International’s Daniel Wolman and Matt Stagg, in conjunction with Kenny Oliver and Charles Carty of hockingstuart Commercial, have been appointed to sell 364-372 Lonsdale Street, situated between Melbourne’s legal precinct and the prominent retail core of the CBD.
Agents expect the property to generate a 5% return, with its long leases to top tenants including Ticketmaster and several popular restaurants.
“364-372 Lonsdale Street is a landmark, freestanding CBD investment with tremendous development upside (STCA),” Mr Wolman said.
The seven-level building sits on a substantial site area of around 780sqm, is comprised of approximately 4,883sqm of building area and has a 3.5 Star NABERS Rating. With prime Lonsdale Street frontage of around 26.46m, the property is a prominent retail destination.
“This location benefits from being within close proximity to an impressive number of world renowned retail destinations including Melbourne Central, Emporium, Melbourne’s GPO, QV and the famous Bourke Street Mall,” Mr Wolman said. “These shopping centres boast a list of prominent national and international retailers including H&M, Zara and UNIQLO.
Similarly, 364-372 Lonsdale Street is a stone’s throw away from one of Melbourne’s famous culinary laneways at Hardware Lane, a popular food and tourist destination.
Also supporting the location is its close proximity to Melbourne’s legal precinct which is bounded by Collins, William, Queen and Lonsdale Streets. 364-372 Lonsdale Street is walking distance to the Supreme Court and the Melbourne Children’s Court, making this location particularly attractive for legal practitioners.
“This exceptional, securely leased investment represents a rare opportunity to acquire a landmark freehold in the centre of Melbourne’s CBD,” Mr Oliver said.
“It is a perfect opportunity to land bank and enjoy the secure rental income now at an attractive yield and take advantage of the huge development potential in the future."
Mr Stagg said the Melbourne CBD was experiencing significant population growth due to an increasing student population from renowned universities including RMIT and The University of Melbourne.
“In order to accommodate for local and international students as well as a high proportion of people moving closer to the CBD, extensive high rise residential and commercial developments are occurring,” he said.
“The property is located within a rapidly transforming section of the CBD that is currently seeing extensive redevelopment and considerable uplift which has been driven by high rise residential living and an increasing student population."
The location is also well connected by public transport, being close to Melbourne Central and Flagstaff Train Stations, major tram routes along La Trobe and Elizabeth Streets and buses along Queen and Lonsdale Streets. The location also boasts easy access to Citylink and Melbourne’s major arterial roads and freeways.
Mr Wolman said the building lent itself to a multitude of uses, with great future potential as a result of its open plan configuration across seven levels.
“This configuration, combined with its premium location, has the benefit of medium term value-add and development opportunities. This could include conversion to residential or hotel accommodation, an iconic mixed use redevelopment, additional office or residential levels or strata subdivision (STCA),” Mr Wolman said.
“The asset presents exceptionally well both internally and externally and provides an ideal retailing and office environment. An asset of this calibre and size is rarely come by in any city yet alone in the centre of the most rapidly growing precinct of the Melbourne CBD.”