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Suburban office market stirred by sales

Two interconnected buildings at 1100 Pascoe Vale Road next to the Broadmeadows Railway Station sold for an undisclosed price believed to be around $10 million. Photo: SuppliedPerth-based syndicator Property Bank is preparing to recycle two Melbourne office assets after successfully offloading a suburban building last year for $23.5 million at a peak point in the property cycle.
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Property Bank’s move follows the year’s first sale of another small office in Broadmeadows.

The syndicator has called for submissions from estate agents on a three-level office in the Richmond Corporate Park which it purchased seven years ago for $18.5 million.

A second suburban office asset in Market Street South Melbourne that the syndicator purchased in 2011 for $8.95 million is also likely to be offered to the market, said people familiar with the matter who didn’t want to be named.

Both assets have been held by the fund for more than six years and would see significant upside if sold in the present market.

Value estimates vary but both offices have been refurbished and are fully let.

The Richmond building at 8/658 Church Street could fetch in excess of $40 million, while the three-level South Melbourne office at 17-33 Market Street might go for more than $15 million.

Property Bank would need to get sign off from fund investors before putting the assets up for sale. The group was approached for comment.

The office that the fund manager sold at 630 Church Street in August last year transacted on a 5.1 per cent yield, highlighting the strength of one of Melbourne’s most sought-after inner-city pockets.

It was snapped up by Manny Stul and stepson Paul Solomon, the pair behind global toy powerhouse Moose Enterprises whose Shopkins Small Mart figurines are on the must-have list of millions of girls aged four to 11 around the world.

Meanwhile, an office owned and developed by Victorian Rail Track in Melbourne’s outer north was purchased by a private investor.

Agents Gray Johnson, Cushman & Wakefield and Kypa Real Estate transacted the two interconnected buildings at 1100 Pascoe Vale Road next to the Broadmeadows Railway Station for an undisclosed price believed to be around $10 million.

The building has a mix of 18 public and private sector tenants returning annual rental income around $1.2 million.

Tenants include Victorian Legal Aid, MIA, Wesley Mission Victoria and Campbell Page . oOh! Media and Vodafone have signage and telecommunications facilities on the building.

Gray Johnson director Matt Hoath said the building had an estimated net lettable area of 4238 square metres and rental potential of $1.35 million if fully occupied and leased.

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