Singapore-based SC Capital Partners has bought a Melbourne office on behalf of its opportunistic RECAP fund series for A$107.08m (US$72.6m) and plans to splash A$40m refurbishing the asset.
The 19-storey office building is located at 412 St Kilda Road and above the new Anzac train station, which is part of the $11bn Metro Rail project.
“This acquisition confirms our belief in the St Kilda Road office market,” said Suchad Chiaranussati, chairman of SC Capital Partners. “With vacancy at sub-6%, the lowest since July 2001, supported by limited supply and robust tenant demand, the property is very well positioned to deliver strong performance.”
The 16,285 sq.m. former Victorian police headquarters is currently vacant, with refurbishments expected to start in early 2020.
Local investment manager Artifex Property Group will oversee the refurbishment, with the refurbished property scheduled to re-open its doors for occupiers in Q1 2021.
“This will be the most significant office regeneration project the St Kilda Road precinct has witnessed in the past 20 years,” said Mark Frinsdorf, director of Artifex Property.
The Metro Rail project, which is scheduled for completion by 2025, features five new underground train stations and 9km twin rail tunnels running underneath the city.
Other major Melbourne office deals this year include Dexus’ A$1.476bn acquisition of the 80 Collins Street precinct in May and the A$830m purchase of 242 Exhibition Street by Charter Hall and Canada’s Public Sector Pension Investment Board in July.
The transaction comes after SC Capital raised US$850m in the final closing of fifth RECAP fund in May this year.
Founded in 2004, SC Capital has $6.8bn in assets under management.
Colliers International’s Trent Hobart and John Marasco handled the off-market sale.