Malaysians join investor push into Melbourne's fringe office market
A company associated with the family of Malaysian timber tycoon Admond Looh has emerged as the $23 million buyer of a historic East Melbourne office building sold by former Rich Lister Lionel Krongold.
The acquisition of Marlion House at 33-41 Agnes Street – a converted warehouse originally build for tea merchants Griffith Brothers – is the latest in a string of CBD fringe office buildings to sell to wealthy private investors amid tight vacancy rates.
Records show Marlion House was purchased for $22.68 million by CYL Investments (Australia) a company two-thirds owned by Mr Looh’s relatives, Sy Choon Yen and Yen Loo Looh. The deal was struck on a yield of about 4.6 per cent.
Mr Looh is the former executive director and chief operating officer of Malaysian logging and timber company Java Bhd. He has also previously held interests in several Australian mining companies.
Purchased by the Herald & Weekly Times in 1926 as a newspaper warehouse, Marlion house was converted into offices in 1988. It was acquired a year later by the Krongold family for $3.6 million.
Krongold Constructions – a residential builder dating back to 1957 – has its offices in the East Melbourne building, which sold fully leased.
Marlion House selling agents JLL and Gross Waddell said East Melbourne, which lies just to the north of the Melbourne Cricket Ground sporting precinct, remained one of the most tightly held office markets, and had one of the lowest vacancy rates – averaging 2.2 per cent over the past 10 years, according to the Property Council of Australia.
“Just as the Notting Hill is to London, or the Upper East Side is to New York, East Melbourne has enshrined itself as the most prestigious and tightly held enclave at the edge of the Melbourne CBD,” said JLL’s head of capital markets, Josh Rutman.
Last month, Elizabeth Ring, the ex-wife of Swisse Vitamins multi-millionaire Stephen Ring, purchased 1 Clarendon Street, a 115-year-old red brick building in East Melbourne formerly owned by Victoria’s Police Association, for more than $22 million in a deal brokered by Colliers.
“The campaign uncovered a huge depth of buyers ranging from investors, developers and owner-occupiers, demonstrating the quality and versatility of this asset,” said Colliers co-selling agent Oliver Hay.
Also, on the Melbourne city fringe, a vacant art-deco office building in West Melbourne owned by a Brunei businessman sold for about $22 million.
Situated directly across from Flagstaff Gardens, the building at 363 King Street on a 1,112 sq m block sold with a permit for a 13-storey office building. Colliers also brokered this deal.
