Carsales.com founders sell Melbourne office development for $60.25m

Carsales.com founders sell Melbourne office development for $60.25m

A Singapore-listed property trust managed by Frasers Property (SGX: TQ5) has bought a fully leased office building in Melbourne’s eastern suburbs for $60.25 million from a property syndicate backed by the founders of carsales.com.

The A-grade property, located at 545 Blackburn Road in Mount Waverley, has been bought by Frasers Logistics & Commercial Trust (SGX: BUOU) in a deal that exceeded market expectations of a mid-$50 million price range.

The project has been nine years in the making for the Future Family Office syndicate, the property’s developer, which is driven by Carsales.com duo Greg Roebuck and Wal Pisciotta.

Located within Monash Technology Precinct, the five-storey office building has a total net lettable area of 7,297 sqm and is fully leased to nine tenants with a weighted average lease expiry of about five years.

The property was sold through an expressions of interest campaign managed by CBRE’s Scott Orchard and Tom Ryan.

“It’s been a nine-year journey of planning and development to bring our vision to fruition for 545 Blackburn Road,” says Lee Mayberry, CEO of the vendor syndicate.

“We had long-term hold intentions for the asset, which is why it was built to such a high-quality specification. Our patience enabled us to put together an equally high-quality tenancy profile, with the building attracting occupiers mostly from the local area.

“However, a number of factors aligned making it more suitable for a passive owner over the next period of the asset’s life.”

CBRE’s senior director Scott Orchard says the strength of interest shown by the underbidders during the expressions of interest campaign reflected a flight to quality among buyers.

“The strong result sets a new benchmark for the suburban market for an existing multi-tenanted office investment,” Orchard says.

“Despite the rising cost of debt, there is still motivated capital that is aggressively pursuing quality investments with the right location, improvement and tenant profile story.”

The property generated interest from local, interstate and offshore parties with Singapore Exchange-listed Frasers Logistics & Commercial Trust securing the property after a competitive second round.

“The acquisition is aligned with our strategy to pursue strategic opportunities which provides attractive yields and enables us to leverage our management expertise in Australia,” says Robert Wallace, the CEO of the Frasers trust’s manager.

“With the property being 100 per cent leased to reputable tenants in diverse industries, the acquisition is expected to further enhance Frasers Logistics & Commercial Trust’s quality tenant mix and portfolio metrics, while providing unitholders with a stable income stream.”

The Frasers trust has a $7 billion portfolio comprising more than 100 properties in five countries.

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