Flight Centre pockets much-needed $62m from sale of Melbourne HQ
Embattled travel agency group Flight Centre has secured a much-needed $62.15 million windfall from the sale of its Melbourne headquarters.
Shakespeare Property Group fended off local and offshore buyers to purchase the 11-level building fronting 436 St Kilda Road.
Flight Centre paid $32 million for the office tower in 2008. It recently flagged that the building’s sale, together with government support initiatives, would help it deal with the 90-95% drop in its total transaction values due to COVID-19 and government travel restrictions.
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Flight Centre, which has just completed a $700 million capital raising, has committed to lease back 75% of the building.
The sale of the 7506sqm building was negotiated by Fitzroys Director Paul Burns, with the transaction set to complete in July.
“Buyers taking a long-term view beyond the COVID-19 environment recognise St Kilda Rd’s fundamentals have it well-placed to maintain its strong performance of recent years,” Burns says.
“Investors have been actively pursuing St Kilda Road buildings with value-add and repositioning potential, looking to take advantage of Melburnians’ increasing preference to live, work and play across the inner city,” he said.
It is understood Shakespeare Property Group bought the building for its strategic location a short distance from the future Anzac Metro station that will further enhance accessibility to St Kilda Rd.
Burns says the lack of investment opportunities in the St Kilda Road precinct encouraged the buyer to act quickly, and it will now set about adding value to the property.
This article originally appeared on www.theaustralian.com.au/property.
