Australian fund management firm Avari Capital Partners has acquired an office building at 355 Spencer Street in West Melbourne for A$38.5 million ($35.48 million). The deal was brokered by CBRE’s Melbourne Middle Markets team.
According to the CBRE press release, Avari Capital has strong links to “investors of Chinese heritage”, many of whom are currently based in mainland China. This marks the first pure commercial office transaction involving Chinese buyers in over a year in the Australian city, says the consultancy.
The last time such a transaction occurred was when a buyer based in China’s Guangdong province acquired the two buildings at 420 and 424 St Kilda Road for close to A$170 million. The deals were also closed by CBRE’s Melbourne Middle Markets team.
The building at 355 Spencer Street has six storeys and a total floor area of 79,215 sq ft. The 21,528 sq ft corner site also features a 90m frontage.
The office building at 355 Spencer Street in West Melbourne was sold for A$38.5 million ($35.48 million). The deal was brokered by CBRE’s Melbourne Middle Markets team. (Picture: CBRE)
According to Avari Capital founder and CIO, Alan Liao, the purchase is in line with the firm’s strategic focus on value-add real estate investment. The company plans to refurbish the property with an internal spec-fit out, service upgrades, and add end-of-trip facilities. They will also add a café or bar in the central courtyard for tenants in the communal space.
Mark Wizel, CBRE director of investments in the Melbourne Middle Markets team, says: “In the context of the current market risk factors and forecasts for where the office market may be headed, the pricing is very strong. If it provides any indication of what is to come, then we may see a much more positive market for the commercial office sector in the near term than anyone would have dared forecast.”
Over the past three weeks, Wizel and his team have sold seven properties worth more than A$120 million. They included 583 Ferntree Gully Road in Glen Waverly, sold for A$23 million; and Woolworths Keysborough, for A$33 million.
“There is no doubt that enquiry and transaction volumes for commercial properties have declined as a result of Covid-19, but some of the activity and successfully completed deals we have seen over the past month indicate that astute buyers continue to look for opportunities,” says Wizel.
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