Flight Centre sells on St Kilda Road headquarters for $62.5m
Cash-strapped Flight Centre, which last month said it would cut 800 stores and raise $700 million to ride out the dip of a travel industry throttled by the coronavirus, has sold its St Kilda Road headquarters on Melbourne’s southern edge for $62.15 million.
Confirming a deal The Australian Financial Review foreshadowed in March, the travel operator said on Thursday it would lease back 75 per cent of the 436 St Kilda Road building it had acquired for $32 million in 2008.
The sale of the building to Shakespeare Property Group, the property arm of investment manager Prime Value Asset Management, was expected to complete in July, Flight Centre said.
While the pandemic had caused buyers in some areas of the commercial property market to pause, demand remained strong for securely leased investments, said Fitzroys director Paul Burns, who brokered the off-market transaction.
“Buyers taking a long-term view beyond the COVID-19 environment recognise St Kilda Road’s fundamentals have it well placed to maintain its strong performance of recent years,” Mr Burns said.
The 11-storey glass tower has a net lettable area of 7506sq m and is on a 2317sq m site opposite Fawkner Park. Five tenants occupy the fully leased building, including Flight Centre and soccer’s state governing body, Football Victoria.
Infrastructure development on St Kilda Road, particularly the nearby Anzac station that was due to open in 2025 as part of the $11 billion Melbourne Metro Rail project, made the property attractive, Mr Burns said.
“My understanding is that SPG see this as an opportunity to buy a strategically located office property, in this case located a short distance from the future Anzac Metro station that will further enhance accessibility to St Kilda Road.”
