484 St Kilda Road

Melbourne, VIC

This property delivered a total equity IRR of 25%.

Abacus acquired 484 St Kilda Road, Melbourne in November 2011 for $68 million in a 25/75 joint venture with global investment firm Heitman LLC. The property was acquired very well on a low rate per sqm of $3,300m2 and an 8.7% initial yield.

The property provided a high quality of accommodation as one of the best office assets in its Melbourne city fringe precinct. The A grade commercial office building comprising ground level retail, 15 upper levels of office space for a total NLA of 20,366 sqm and 224 car parking bays and offered an outstanding core plus opportunity within the office sector at that time in the market. The sub-market was experiencing tightening vacancy levels and significant tenant relocations to the precinct nfrom the CBD. The joint venture maintained a high occupancy across the property with significant tenant retention and achieved substantial improvements in rental rates across new and retained leases. The sub-market had attracted strong tenant covenants which became attractive to international and domestic institutions.

The property was sold in August 2014 for $94.0 million setting sub-market records for capital rate per sqm at the time.

Ownership interest 25%
Acquisition price $68 million
Sale price $94 million
Capital uplift $26 million or 38%
Equity IRR 25%
Net lettable area 20,366m2