Singaporeans snap up another Melbourne office tower
Listed Singaporean property player Lian Beng has pounced on another office tower for $51.5 million as it builds its Melbourne portfolio.
The group, which has a market capitalisation on the Singapore stock exchange of about $209 million, snapped up an 18-level city office in which 11 individual strata owners had joined forces to put the lot up for sale.
The sale of the nondescript office at 50 Franklin Street, built in 1965, marks a peak in a trend that has involved property owners across Melbourne joining forces to offer their adjoining properties as single sales to take advantage of a heated market in which developers are willing to pay a premium for larger, combined sites.
Colliers International’s Trent Hobart, Daniel Wolman, Matt Stagg and Oliver Hay were the transacting agents.
Mr Hobart said the office, which will be vacant on settlement, attracted 170 inquiries from student accommodation providers, developers, hoteliers and educational institutions.
The property is located in the heart of Melbourne’s fast growing student precinct near RMIT and Melbourne University, which has been home to a wave of development catering to the education sector.
The Franklin Street building was formerly the headquarters of Qantas and was developed by PDG Corporation into strata offices in 2010.
Its current tenant, ASX-listed marketing services group Salmat, will move out once its lease expires in February.
Singapore’s construction and property companies face significant competition from Chinese developers in their home market, particularly on the island state’s doorstep in southern Malaysia.
In the special economic zone of Johor Bahru, across the strait from Singapore, China’s major developers have swamped the market and pushed prices lower with a glut of hundreds of thousands of new homes.
The competition at home may herald a shift in focus to Australia.
“In recent months we have noticed a resurgence of demand from our Singaporean clients, especially for value add and investment property,” Mr Hay said.
Colliers has transacted more than $150 million in assets with Singaporean clients alone over the past month, he said.
Another strata titled property – controlled by two different owners – at 28 Elizabeth Street is now being offered for sale through CBRE.
That building is fully leased until 2023, returning income of $828,639.
Lian Beng purchased the iconic Newspaper House at 247 Collins Street for $23 million earlier this year, a building that was also offered with vacant possession by Melbourne horseracing identity Ken Biddick.
The Singaporean group has also submitted plans for a 19-level tower on a site it bought at 596 St Kilda Road for $25 million in 2015.
The plans for the 170-dwelling St Kilda Road tower eschew the traditional high-end focus of many of the leafy boulevard’s other residential projects by concentrating on larger single bedroom units rather than penthouse-style homes.
The tower will include a vertical garden draped over the building’s exterior.
The story Singaporeans snap up another Melbourne office tower first appeared on The Sydney Morning Herald.