EG, one of Australia’s leading real estate fund managers, is pleased to announce exchange of contracts for the divestment of key office asset 277 William Street, Melbourne at a transaction price of $93.88 million to an undisclosed Hong Kong investor.
The 12-storey office building located in the heart of Melbourne’s legal precinct was originally acquired by the EG Core Plus Fund No.1 in November 2015 for $45.9 million.
EG re-let over 70% of the property and undertook significant cosmetic and plant and machinery upgrades during the hold period including new ground floor lobby, the addition of retail amenity and upgraded infrastructure throughout the building. The WALE of the property was also increased from 3.3 years to 3.9 years.
After a number of unsolicited approaches to acquire the property EG decided to market 277 William Street for sale to take advantage of the significant change in fundamentals within the Melbourne office market.
The building has a net lettable area of 12,080 sqm, 32 car bays and is well located nearby Flagstaff Train Station and the Queen Victoria Markets.
Divisional Director, Daniel Farley said “we are pleased to announce the successful transaction of William Street, an asset which identifies as a prime example of EG’s core plus strategy. The property has seen a complete turnaround during our hold period and is now a quality B grade asset boasting a strong leasing success rate and excellent environmental credentials. We’re proud of what we’ve been able to achieve with this asset.”
“We’re still big believers in the Melbourne office market which boasts strong white-collar employment growth and superior supply demand forecasts over the foreseeable future.”
The campaign was managed by CBRE agents Kiran Pillai, Josh Rutman, Lewis Tong and Neva Courts and JLL’s Leigh Melbourne, Langton McHarg and Paul Kempton. Mr Pillai commented; “the positive office market fundamentals in Melbourne continue to underpin strong interest from local and offshore investors, particularly from markets such as Singapore and Hong Kong. A distinct shortage of deal flow over the course of 2018 has meant that when quality assets are brought to market, competition is strong and pricing is well ahead of the curve.”
Mr McHarg of JLL commented; “we were delighted with the depth of interest from the marketplace, which validates EG’s decision to dispose of the asset at this time and realise a strong result for their investors.”