Market Insights


Schwartz family sets new Melbourne benchmark with Liberty Tower retail sale

Melbourne’s Schwartz family realised $21,500,000 from the sale of a portfolio of ground floor shops beneath Melbourne’s landmark Liberty Tower apartment tower, representing the largest strata portfolio transaction in the city’s history.

The eight shops were offered together after 20 years of ownership as part of CBRE’s latest Premium Property Portfolio Auction (PPPA).

CBRE’s Josh Rutman, Nathan Mufale, Kevin Tong, Dylan Kilner and Max Ruttner marketed the properties, with the sale to a Sydney-based investor reflecting a new pricing benchmark for strata portfolio investments in Melbourne’s CBD.

Situated on the corner of Spencer and Collins Streets, Liberty Tower was developed by the Schwartz family, with developer turned publisher Morry Schwartz and his brother Danny having held onto the retail component since the tower’s completion in 2002.

Tenants include an IGA supermarket, Japanese eatery Purple Peanuts and Gloria Jeans Coffee, which is set to vacate the store mid-way through 2019.

Mr Danny Schwartz said; “Selling a property like this needed something different so we crafted a very special campaign and went in hard on the direct marketing. The team at CBRE left no stone unturned and targeted key groups to ensure we got results. The auction was pure theatre, the team generated a frenzy and the atmosphere was electric.”

CBRE’s Mr Rutman said nine bidders participated in the auction, with some of Melbourne’s biggest landlords in attendance and bidding representation from Malaysia, mainland China, Taiwan and Hong Kong.

“The Liberty Tower portfolio was not straightforward, which proved challenging for some of the more traditional retail investors,” Mr Rutman said.

“There were also constraints surrounding the owners’ corporation which needed to be worked through. We expected strong interest, but were pleasantly surprised by the sheer depth in the market.”

CBRE’s Mark Wizel added; “The decision to offer the shops via a portfolio auction differed to the conventional wisdom, suggesting either an Expressions of Interest campaign or on-site auction, however the result and depth of bidding on the night is proof that the PPPA platform is resonating with buyers.”

It is the latest example of a developer choosing to divest the retail component of a project, with Jeff Xu of Golden Age Group having recently transacted the ground floor retail portfolio of 452 Elizabeth Street for $13.65million.

The sale is also the latest sign of investor interest in the western precinct of the Melbourne CBD, follow the sale of 454 Collins Street to a Macau based investor and the acquisition of 601 Bourke Street to China-based Far East Enterprise.

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