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The Victorian headquarters of embattled travel agency Flight Centre (ASX: FLT) have sold for $62 million today.
Shakespeare Property Group, the property arm of boutique investment manager Prime Value Asset Management, has acquired the building on 436 St Kilda Road.
Flight Centre says the $62.15 million sale will be completed in July 2020.
According to real estate group Fitzroys who brokered the deal there were numerous parties interested in acquiring the property but ultimately a deal was negotiated with Shakespeare Property Group in an abbreviated timeframe.
Five tenants currently occupy the 11-storey glass building that sits opposite to Fawkner Park, including Flight Centre and Football Victoria.
According to Fitzroys director Paul Burns says securely-leased investments remain highly sought after even during this COVID-19 economic environment.
"Buyers taking a long-term view beyond the COVID-19 environment recognise St Kilda Road's fundamentals have it well-placed to maintain its strong performance of recent years," says Burns.
"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.
"The dearth of investment opportunities in this precinct encouraged the buyer to act quickly, and they will now set about adding value to the property and deliver strong returns to their investors."
For Flight Centre the sale of the HQ comes as the company is struggling during the COVID-19 health crisis which has decimated the travel and tourism industries broadly.
Sales at the travel agency group fell to just five to 10 per cent of normal levels during April as a result of COVID-19, with the small amount of sales still being processed coming from China.
The company also recently completed a $700 million capital raise that saw the shareholdings of its founders dramatically diluted.
Flight Centre was forced to stand down approximately 6,000 staff and close half of its shops internationally, which is expected to result in annualised savings of $1.9 billion.
This translates to anticipated monthly operating cash costs of approximately $65 million, which will be implemented by the end of July.
Shares in Flight Centre are down 0.40 per cent to $9.96 per share at 3:59pm AEST.
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