The $15m Queen St office building in Melbourne’s CBD is attracting interstate buyers seeking income-producing commercial property in the city’s financial precinct.
Interstate investors are circling a rare $15m slice of Melbourne’s financial spine as one of Queen St’s tightly held office blocks hits the market.
The eight-level pre-war building near the Collins St end of Queen St comes with a passing income of $537,500 a year, offering immediate cash flow while leaving roughly half the space vacant for occupation or lease.
That mix of income and flexibility is drawing buyers from beyond Victoria, with Melbourne’s softer pricing compared to Sydney adding to the appeal.
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Colliers manager of investment services Ryan Milivojac said interstate groups were increasingly viewing Melbourne’s CBD as relative value.
“Despite Victoria’s tax settings, Melbourne is still being viewed as good relative value compared to other capital cities,” Mr Milivojac said.
“We’re receiving strong enquiry from interstate buyers.”
Mr Milivojac said opportunities to secure entire freehold buildings of this scale in the core financial precinct were scarce.
“There simply aren’t that many buildings of this size in that core stretch,” he said.
The Queen St commercial building offers investors exposure to Melbourne CBD office real estate with strong holding income.
“When you narrow it down to between Flinders St and Bourke St, particularly around the Collins St end, there are only one or two of this scale.
“Everything else tends to be significantly larger.”
Spanning 1720sq m with floorplates averaging about 215sq m, the property is more easily leased than the large glass towers that dominate much of the CBD skyline.
Approximately half the building is tenanted, providing steady income, while the remaining space presents an opportunity for an owner-occupier to establish a headquarters in Melbourne’s traditional legal and financial heart.
“It gives an owner-occupier the opportunity to secure a foothold while still benefiting from supplementary income,” Mr Milivojac said.
Located near Collins St, the Melbourne CBD office provides flexible floorplates suited to owner-occupiers or tenants.
Positioned just off Collins St, the building offers tenants proximity to the city’s premium business strip without the same rental impost.
“You’ve got positioning within that premium Collins St precinct, but you’re not paying Collins St rental levels,” Mr Milivojac said.
“That creates an opportunity for tenants who want prestige and location without paying top-of-market rents.”
Constructed in 1939 and designed by Melbourne architects A and K Henderson, the property was originally developed as offices for the National Trustees and Executors Company.
The eight-level Queen St property spans 1720sq m in one of Melbourne’s tightly held financial corridors.
Interstate buyers are viewing Melbourne CBD office assets like this Queen St building as relative value compared to Sydney.
Its brick facade remains a reminder of Melbourne’s pre-war money district, long before the era of full-height glass towers.
As the Melbourne CBD continues its post-pandemic recovery, property experts told NewsCorp Australia the chance to secure a heritage freehold in the city’s financial corridor is attracting buyers prepared to back Melbourne’s long-term fundamentals.
The property is being offered via international expressions of interest closing March 12.
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david.bonaddio@news.com.au
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