New investment group eyes city office block
A 30-year-old St Kilda Rd office block is likely to become the first asset jointly owned by the embryonic commercial venture between developer Grocon and Swiss-based funds specialists UBS Global Asset Management.
JLL has secured a $94 million deal to sell 484 St Kilda Rd to the newly christened UBS Grocon Real Estate on behalf of Abacus Property Group and Heitman LLC.
The 16-storey building leases 20,000 sqm of office space and is anchored by Australand, Symbion and Glencore Grain. It includes two levels of car parking.
The six-month-old UBS Grocon Real Estate is targeting premium commercial and retail properties, according to JLL’s Robert Anderson.
“The new group is seeking A-Grade assets with a high level of reliable long-term cashflow generation and 484 St Kilda Rd fits the bill,” Anderson says.
When the sale is inked, it will represent a yield of 7.65% on a passing yearly income of about $7.2 million.
When the sale is inked, it will represent a yield of 7.65% on a passing yearly income of about $7.2 million.
UBS Grocon Real Estate will be charged with sourcing market-leading opportunities for investors.
It plans to meet demand from institutional investors for a range of fund types and property investment products, including core office, residential “and other value-add and opportuntistic investments”.
A second Melbourne CBD property is expected to be folded into the venture after Grocon, which owns the 85 Spring St site, redevelops it into a high-rise tower.
Overlooking Treasury Gardens, the project will comprise residential apartments.
The existing building was sold by Kador Group for an undisclosed amount. Kador bought the property two years ago for $48 million.
The UBS-Grocon venture will have first right of refusal after the Spring Street tower is developed. Other current and future Grocon constructions will also be offered first to the venture when they go on the market. The developer has a pipeline of projects worth about $2 billion.
Rezoning heat on fireplace specialist
Gas and wood fireplace specialist Jetmaster has felt the rezoning heat in South Sydney and been forced to relocate, according to agents Knight Frank.
Findings from a recent report indicate more than 70 businesses have been displaced from suburbs south of the CBD in the past year as industrial areas were newly categorised under planning laws encouraging mixed redevelopments.
The agency says that since the same time last year, it has sold more than $150 million worth of South Sydney real estate.
More than 70 businesses have been displaced from suburbs south of the CBD in the past year.
Knight Frank research shows that suburbs west of the CBD are attracting many companies searching for a new address.
“Marrickville, a fast-growing inner-west precinct, is proving a popular industrial area given its close proximity to the Port Botany, Sydney Airport, main arterial roads and the CBD,” says Knight Frank’s Brooke Railton.
Jetmaster recently paid $3.3 million for a vacant, freestanding warehouse in Marrickville after selling two of its South Sydney properties.
The 1400 sqm building at 55 Marrickville Rd is in a high-growth area just 350 metres from Sydenham Train Station and close to main arterials with direct access to the CBD and Sydney airport.
Ethical clothes at home in Melbourne
An ethical apparel manufacturer has leased a 204 sqm property in the heart of Melbourne’s CBD.
In a deal brokered by Savills, Artisan Textiles Australia will occupy the 306 Little Collins St site, which forms part of Causeway House.
The new 10 year-term comprises rental of about $250 per sqm a year.
Savills said the tenant would be using the property as a dual space, selling unique lines of clothing and manufacturing for its own brand and for emerging Australian labels.
Artisan Textiles is endorsed by Ethical Clothing Australia and specialises in using recycled fabrics.
