News Corporation strikes sale and leaseback deal in Blackburn
The long-time Blackburn home of Leader Newspapers has been sold off market for $30,200,000 by parent company News Corporation.
The largely vacant, 1 Chapel Street office building has been acquired by a local fund manager in a deal negotiated by CBRE’s Melbourne Middle Markets team.
The sale represents the largest suburban office transaction outside the CBD and city fringe year-to-date.
Based on the net lettable area of 6,059sqm, the sale price represents a building rate of around $5,000/sqm.
The Blackburn area has been home to Leader Newspapers for decades, with the group’s former site at 160 Whitehorse Road recently sold by CBRE for close to $24,000,000 to make way for a major residential development.
The sale of the group’s current office at 1 Chapel Street had been structured to allow Leader Newspapers to continue its partial tenancy in the building on a 5-year leaseback.
CBRE Melbourne Middle Markets Director Scott Orchard said the deal added to a healthy list of suburban Melbourne office sales this year.
“White-collar employment growth, tenant demand and rising rents, coupled with increased investor capital from local, interstate and Asian buyers, is underpinning buyer interest and pricing in Melbourne’s suburban office sector,” Mr Orchard said.
“This is prompting an increasing number of long-term office property owners to capitalise on the current strong market conditions and explore divestment opportunities.” Fellow CBRE Director Kiran Pillai said strengthening tenant interest in quality suburban leasing opportunities had been a key driver of buyer interest in assets such as 1 Chapel Street.
“Growing levels of commercial development activity in Melbourne’s city fringe and suburban markets are being fueled by a shift in strategy from tenants seeking quality accommodation focused largely on the needs and wants of their staff,” Mr Pillai said.
“We are seeing off the plan pre-commitments and speculative development activity in various locations in the east and south-east, the inner north, the west through William Landing and even as far as Geelong with the recent opening of Quintessential Equity’s WorkSafe development and Techne Development’s Carlton Project, which delivered the new headquarters for NDIS.”
This sale follows a string of suburban Melbourne office sales by CBRE for notable sellers including Cedar Woods, the Myer family, Harold Mitchell, Mark Ruff of Qanstruct and Probuild’s Phil Mehrten. The next available suburban office building to be offered for sale in Melbourne is 12 Carters Avenue, Toorak.
The fully leased, two-level office building in Melbourne’s most prestigious suburb, is being marketed by the CBRE Melbourne Middle Markets team and will be sold via public on-site auction on 23rd November 2018.