Devitt family sells suburban offices on sub 4 per cent yield
LU Simon boss Peter Devitt has reaped the benefits of Melbourne’s hot suburban office market after selling the Kew Corporate Centre for more than $20 million.
The near half-hectare site, home to four office buildings, at 830-832 High Street and 1401 Burke Road in Kew East sold to a Melbourne-based local investor.
Selling agents Paul Henley, Tom Ryan and Tim Grant from Knight Frank declined to reveal the price or identity of the buyer but said the net yield was sub-4 per cent on a fully-leased basis.
The corporate centre sold with a 92 per cent occupancy rate. About a third of the complex is occupied by serviced offices.
Price expectations were in excess of $19 million when Kew Corporate Centre was listed for sale in April.
Mr Devitt and his family had owned the property since 1991, when they paid $5.3 million.
He and his son Kane Devitt are major shareholders in LU Simon, one of Melbourne’s premier building companies.
Mr Ryan attributed the strong sales result to the building’s location and large landholding in a market “starved of good quality metropolitan offerings”.
He added that the site was also “grossly under developed” and was generating rental income below market rates.
In May last year, another major Melbourne construction identity, Probuild founder Phil Mehrten sold a Hawthorn office building for $15 million on a record low yield of 3.2 per cent. Initial price expectations were above $9 million.
The only other major Melbourne suburban office offering currently on the market is the 6000-square-metre Dulux head office in Clayton in the south east, which has a $25 million asking price.
The Dulux building is being sold by the Tarascio family’s Salta Properties. CBRE are the selling agents.
