$32m sale: Kings Way office could become 12-level development

Melbourne commuters who use Kings Way will almost certainly recognise this landmark office.

And now they know what it’s worth, after the building sold for a cool $32 million this month.

The five-level property at 210 Kings Way is a well known feature that marks the on-ramp to the West Gate Freeway and is one of the last remaining development opportunities in South Melbourne.

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A local investor snapped up the site amid fierce competition on a tight yield of 4.78% – representing $6410 per sqm of net leasable area.

The property is fully leased to several long-term tenants including Datacom, QuinetiQ and Petstock, and produces an annual income of $1,531,140.

The site also has a mixed-use zoning, making it ripe for development in the future.

A preliminary investigation by Hayball Architects previously found it suitable for  a 12-level building offering more than 20,000sqm, including a new access off York St and clear views of the CBD and surrounding area.

Lemon Baxter Director Chris Curtain brokered the sale for the private group Clantot Pty Ltd and says the site’s potential attracted strong interest during the campaign.

“It offers exceptional and uninterrupted views of the CBD and surrounds. Natural light from all sides and generous carparking on site and it is close to amenities and public transport. The ingredients tenants want.”

The building at 210 Kings Way (middle left) sits at the entrance to the Westgate Freeway.

The Kings Way site has a colourful history, originally developed in 1973 for Telstra and redeveloped in 2000.

At one stage it contained a Mercedes-Benz and Rolls-Royce showroom.

It was also owned by now disbanded retirement village operator Primelife and bankrupt mining magnate Joe Gutnick.

The current building includes 4993sqm of commercial office space plus 86 secure car parks.

All the leases have break clauses or expire within a few years, leaving the building vacant for development by 2021.

The opportunity was not lost on buyers,  with 150 inquiries and six competitive offers from both local and overseas buyers.

The latest deal comes as Melbourne’s fringe continues to boom.

Another South Melbourne site at 142 Dorcas St was recently sold to the Victorian Government for $23 million.