RMIT University sells Melbourne CBD building in hotly contested tender
Melbourne-based RMIT University has offloaded a major city building in the heart of the Melbourne CBD as part of a $200 million-plus repositioning play driven by funds manager Futuro Capital.
The move is a sign of rising confidence in the city office and retail property markets as new stock hits the market as vendors grow in confidence.
Futuro Capital, a Sydney-based investment group jointly owned by Ben Hopkins and Philip George, secured the RMIT building last year and has just settled on the $133 million deal.
In a twist, they also acquired the historic Tivoli Arcade, retail shops and carpark on Bourke Street in Melbourne from long-time owners Venton International for $73 million.
Acquisition of the 6000sqm property follows Futuro winning a competitive bid from local institutions and private equity players for the acquisition of the RMIT building in Bourke Street, which sits above the arcade.
The hotly-contested RMIT University tender covered the 23,000sqm of offices above the Tivoli Arcade, via a sale and leaseback program over five years allowing current RMIT activities to remain in place for the medium term. The sale price reflects an initial yield of 6%.
The campaign was managed by CBRE’s Kiran Pillai, Scott McGlone, Mark Coster and Stuart McCann, and Gross Waddell’s Andrew Waddell, Danny Clark, Michael Gross and Raoul Salter.
Mr Pillai said RMIT received 20 bids for the property, a testament to the “strong conviction buyers have in the outlook for the Melbourne office market”.
Futuro’s purchase of the arcade and carpark, through Oliver Hay, of Colliers International, and Tony Tai, from TT Global, consolidates its ownership of the 30,000sqm building and more than 3000sqm of prime Bourke Street land.
Futuro Capital also acquired the Tivoli Arcade, below the RMIT Bourke Street building, in a separate deal. Picture: realcommercial.com.au/for-lease
The investment group plans a major refurbishment of the property, with the arcade to be repositioned as a high-end retail destination.
Futuro director Ben Hopkins said the freehold strata building had significant potential for further development and rental reversion, with a long-term lease in place with RMIT.
“Bourke Street is one of Melbourne’s major thoroughfares and the property has 17 levels of high-quality commercial offices with floor plates averaging 1670sqm, while the arcade has significant potential value accretion following a total refurbishment,” he said.
Futuro worked with investment partners Baring Private Equity Asia and Singapore-listed SLB Developments to secure this transaction.
The consolidation of the Melbourne site follows Futuro beating major developers to acquire four prominent buildings in the northern Sydney suburb of Crows Nest for $51 million. The high-exposure, freehold buildings are on Crows Nest’s most prominent corner, opposite the new Crows Nest Metro Station under construction, with mixed-use zoning and height limit of 24 storeys.
This article first appeared on www.theaustralian.com.au/business/property.
