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COLLINS STREET CLASSIC HITS MARKET IN RARE OFFERING - AFR

Posted on 03 November 2020

COLLINS STREET CLASSIC HITS MARKET IN RARE OFFERING - AFR
A classic Collins Street office block, built in the 1930s and now home to the head office of Chinese giant Alibaba, has hit the market with expectations of $30 million.
 
The art deco era building, with its distinctive modern gothic facade, is one of the few to hit the Melbourne market this year during a period of extended disruption from the pandemic and repeated lockdowns. 

The nine-storey tower at 411 Collins Street, held by a private family, has been offered just as the city's second lockdown eases, allowing inspection of commercial properties. It coincides with the Reserve Bank's decision to cut the official rate to a record 0.1 per cent, a move expected to drive further invest­ment into annuity-style returns from commercial property.
 
'The building is well positioned for rental growth when the market stabilises, said Colliers International's Oliver Hay, who is brokering the property with colleagues Matt Stagg, Daniel Wolman and Leon Ma, and Frank Vinci and Joseph Carbone of Vinci Carbone.
 
Between William and Queen streets, the building, between William and Queen streets, has a total area of 3150 sqm. Other tenants include convenience store 7-Eleven.
 
While a handful of institutional grade assets have changed hands in the Mclboume CBD this year - including the S125 million sale of the St Collins Lane mall and Dexus' $450 million divestment of Flinders Street office tower - there have been few offerings of the ilk typically traded in the high­net worth and family office market.
 
'Collins Street assets under $50 mil­lion are becoming almost imposstble to acquire,' Mr Vinci said.

There is overwhelming pent-up purchaser demand for prime Mel­bourne CBD assets from local, inter­state and offshore investors.' 

The sales process for one of the few other such assets also in the market is expected to conclude within days: the 1880s Renaissance-style Louis Vuitton building building at the "Paris end" of Collins Street.
 
The four storey building, owned by the Kearney family, is expected to sell for more than $50 million.