December, 2017: Mulgrave office investment sold for initial yield of 7.5%
A multi-building investment in a fully leased office park in Mulgrave has sold by expression of interest campaign for over $21 million to a major Australian property fund manager.
The sale comes as demand continues to grow in Melbourne’s booming South East corridor, especially within the Monash National Employment and Innovation Cluster. Major companies with the cluster include Monash University, Monash Medical Centre Clayton, Monash Children’s Hospital and the Australian Synchrotron.
The investment, comprising 2 modern boutique office buildings on separate titles, has a total lettable area of 5,851 square metres. The purchase was struck at a initial yield of around 7.5%. The buildings are leased to tenants including PZ Cussons, Tyco and Carter Grange on a combined fully leased net income of $1,611,438 p.a.
Commenting on the sale, Robert Stanley-Turner of Box Commercial Estate Agents said, ‘Mulgrave is only 24 kms from the Melbourne CBDI’m not surprised that both buildings are fully leased. Demand is strong from all kinds of accessory businesses and suppliers to the major employers in the area.’
Box Commercial Estate Agents consults to property syndicators across Australia, monitors sales and trends in group investments and refers individual investors to investor groups.
Mr Stanley-Turner also said that the quality of the building played a role in the strong demand from tenants.
‘Both these buildings have natural light to four sides and ample parking,’ Mr Stanley-Turner said. ‘The purchaser is intending to offer it for group investing and I’m expecting the demand to be high there also.’