QUICK TURNAROUND FOR $20 MILLION OFFICE IN MELBOURNE OUTER-EAST

QUICK TURNAROUND FOR $20 MILLION OFFICE IN MELBOURNE OUTER-EAST
AN office building in Melbourne's outer eastern suburb of Mount Waverley has sold for $20.5 million just two years after it was last acquired.

A private local investor purchased the standalone office building from United Investment Management (UIM) which was acquired by UIM in 2015.

The office, located at 17-21 Hardner Road, is securely leased to Australian apparel business The PAS Group, and attracted competitive interest from investors.

Colliers International's Peter Bremner, who brokered the deal, says UIM was pleased with the result which he considers to be strong for Melbourne's outer-east.

"The sale price reflects a passing yield of 6.98 per cent, which is considered a strong result for an office in Melbourne's outer-east on the three-year WALE," says Bremner.

The campaign received interest from locally based private investors, interstate syndicates, and offshore buyers.

"Mount Waverly is considered Melbourne's demographic centre, encompassing a strong blue- and white-collar workforce base, which is attracting hoardes of interested parties wanting to establish a presence in the market," says Bremner.

"Buyers recognise that The PAS Group, an ASX-listed tenant, was very sticky in the building and likely to stay long term, with its lease expiring in June 2020 and two further four-year options to renew."

The Hardner Road sale is the latest in a string of office acquisitions in the past six months, suggesting strong demand for Melbourne's outer suburbs.

Colliers International sold 10 Wesley Court in Burwood East for $19.55 million in late 2016.

Bremner suggests Melbourne's outer suburbs will continue to be a strongly performing area.

"Buyers are still very keen for well-located suburban office investments, with easy access to main roads, public transport and retail amenity," says Bremner.

"The yields being achieved in these suburbs are the sharpest we've witnessed, mostly between 6.5 and 7.5 per cent."

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