Investor snaps up rare parking place Author: MICHELLE DRAPER Date: 07/06/2006 Publication: The Age Section: Business Page: 5
A SEVEN-STOREY city car park and office building at 380 Lonsdale Street has sold for $30.5 million to a private investor, in a busy week of sales in the CBD.
The building sold on a yield of 7.35 per cent.
Knight Frank Victoria managing director Paul Burns, who brokered the deal, said the opportunity for investors to snap up a car park in the CBD was extremely rare.
"In the past few years, only a handful of car parks have been available for purchase," he said.
The seven-level building includes four levels of car parking containing 445 parking bays. It is fully leased to commercial and retail tenants, including the Equal Opportunity Commission, Meridian International School and Peregrine Adventures.
Mr Burns said the building had a mix of new and long-term tenants and that most rental agreements had only recently started on modest rates, from which growth was expected.
"The two key elements of this property, the car park and the office, provide an in-built investment diversity that is relatively scarce," Mr Burns said.
The deal was also brokered by Clinton Baxter of Knight Frank, with Anthony Wilson from Savills.
The 380 Lonsdale Street sale is just one of several confirmed and unconfirmed deals hatched this week.
One unconfirmed report was that FKP Property Group was buying 399 Lonsdale Street. Although the sale price could not be confirmed, the owner, the philanthropic Cass Foundation, expected a sale price of $30 million.
It is believed that the property is under contract to sell, subject to conditions.
The 10,000-square-metre, 12-storey building is fully leased to an educational institution, Taylors College, on an 11-year lease that expires in December 2008. This generates rent of about $2.2 million a year.
FKP, which this week announced the purchase of a $17.5 million Campbellfield industrial site, declined to comment. But The Age has confirmed that FKP expressed an interest in the property.
Meanwhile, Macquarie Office Trust confirmed late on Monday that it had bought 171 Collins Street for $27.6 million.
The trust plans to develop a $180 million prime-grade, 27,000-sq-m, 20-plus-storey office tower with ground-floor shops. Several international high-end fashion retailers are believed to have expressed an interest in locating shops at the site.
Frank Vinci, of Vinci Partners, which brokered the deal, would not comment on the number of shops, but said a large amount of retail would extend from Collins Street, through a laneway, to Flinders Lane.
The site amalgamates 171 Collins Street with 14 Watsons Place and 178-184 Flinders Lane.
Mr Vinci said there had been contact from several upmarket international retail chains about the development.
Macquarie Office Trust said it would focus on securing precommitments over the next year.
The redevelopment is expected to generate returns of 15 to 20 per cent.