Jewel in Melbourne CBD’s crown for sale with a $35 million price guide

One of Melbourne CBD’s most prominent landmarks has come to market, with the London & Lancashire Building on Collins Street set to fetch in excess of $35 million.

Located at 400 – 402 Collins Street, the fully refurbished and restored office building, which includes two penthouse floors, is being sold via an expressions of interest campaign.

The classic style 1865 building was first designed by architect Austin & Ellis as the Melbourne headquarters of the Australasian Insurance.

It was then the home of London & Lancashire Insurance Co, whose name remains engraved into the stone façade.

Colliers International selling agent Matt Stagg said the seven-storey building was one of the most intact heritage precincts in the Melbourne CBD.

“In terms of a building in this type of price range, a private investor can acquire it and not have to worry about it,” he said.

“It’s very much an intergenerational investment. So, it’s one of those properties that’s in such good condition and it’s very passive. Comparing it to a car, it’s like buying a Rolls Royce.”

It was being sold by a private investor and developer, and Mr Stagg said interest had been strong in the few days since it had hit the market.

Properties in Collins Street were very popular and typically attracted double the enquiries of anywhere else in the Melbourne CBD, Mr Stagg said.

He said it would suit high net-worth or private investors, with some owner-occupiers also looking to occupy part of the building in future.

Major office towers including GPT’s newly refurbished 390 Collins Street and Cbus Property’s iconic 447 Collins Street surround 400 Collins Street.

Colliers Melbourne Asia market director Leon Ma said Collins Street was Australia’s most prestigious business address.

“This is a major attraction for Chinese and Asian Investors entering the Australian market,” he said.

A blue chip investment

The building’s seven levels feature high quality office accommodation spanning a total net lettable area of approximately 2,377 sqm.

The levels vary in size from 249 to 305 sqm, and have been leased to whole floor tenants.

Six commercial tenants occupy the building. Picture: realcommercial.com.au/for-sale

Of the seven levels, six have been leased to commercial tenants including Cottee Parker Architects, Quinert Rodda Lawyers, Hengyi real estate developers and JL Mullen Engineers.

Level 2 is available for lease, which might also be considered by part owner-occupiers.

Described in its listing as a blue chip investment, the building underwent an extensive refurbishment in 2013 where the interiors were revamped and restored, receiving a 4.5 star NABERS rating.

“For that time, when it was done in 2013, the technology put into in – electrical work, air-conditioning, lighting – that period in time it was the most advanced in the CBD and that was when NABERs came in, [it was] ahead of its time at the time of refurbishment,” Mr Stagg said.

Office demand makes a comeback

New data from Real Capital Analytics has revealed during the 12 months to June 2022, little more than $25 billion worth of offices were sold in Australia, which was a 45% increase from the
previous year.

Office search volumes on realcommercial.com.au during 2020 experienced the sharpest drop in both buy and lease searches. However, they have now seen the strongest rebound during the past 12 months.

The Property Council’s occupancy data has found that in Melbourne and Sydney, office occupancy has grown steadily since the start of 2022 as workers spend more time in their offices after periods of working at home due to the pandemic.

A place in history

Mr Stagg said the front facade was heritage-listed, and 400 Collins Street was one of the best examples of fully restored classic style buildings in the Melbourne CBD.

The facade of 400 Collins Street is heritage-listed. Picture: Lyle Fowler/State Library Victoria

According to the Victoria Heritage Database’s Statement of Significance, 400 Collins street was part of the Victorian Heritage Inventory, for “its potential to contain historical archaeological remains associated with the settlement and growth of early Melbourne.”