Music promoter Michael Coppel sells office tower for $35m

Standing on a 1028 square metre site on the corner of Queen and La Trobe streets at the northern end of the CBD, it was offered to the market in July, 85 per cent occupied. Tenants include Bayside English College, a number of Melbourne law firms and the Victorian Law Reform Commission.

Selling agents JLL said 333 Queen Street had been purchased by a local land banker for about $35 million – near the top of price expectations of $30 million to $35 million.

Title searches reveal a caveat was placed over the property by Sukha Land, directed by well-known CBD property investor “Jimmy” Lai Huat Goh and Rong Liu.

In mid-2013 Malaysian-born Mr Goh sold a portfolio of three CBD sites including a large multistorey carpark at 250 La Trobe Street to Malaysian developer UEM Sunrise for $80 million. The La Trobe Street site was subsequently developed by UEM into one of the city’s tallest towers, the 92-level Aurora with more than 900 apartments.

Vendor Michael Coppel sold his six-bedroom Toorak mansion for $30 million in 2021.

Highlighting the lack of office tower deals occurring at the big end of town amid a sharp fall in values and two-decade high vacancy rates, the next biggest office sale this year in the Melbourne CBD was a 12-level property at 99 Queen Street, which fetched $30 million in April.

By comparison, last year’s biggest office transaction in Melbourne was Charter Hall’s $2.1 billion deal to buy the two-tower Southern Cross complex with the backing of Singapore’s sovereign wealth fund GIC.

Nick Peden, Josh Rutman, Tim Carr and MingXuan Li negotiated the sale of both 99 Queen Street and 333 Queen Street.

The sales campaign for 333 Queen Street drew interest from a mix of local, interstate, and international investors. It’s the only Melbourne CBD transaction with a land area greater than 1000 square metres this year, the agents said.

Mr Rutman said more than three-quarters of bids were backed by Asian capital.

“Following a recent trip to Singapore and Hong Kong, it is clear that investors see office as a strategic countercyclical play, particularly for assets with sound fundamentals and large underlying land components,” he said.

Mr Peden said his team was in discussions with a number of long-term holders of office assets who were assessing the best way to maintain the value of their properties given the challenges of higher vacancy rates and increasing holding costs such as land tax.

“Some have looked to partner with groups that have expertise in the repositioning of office buildings to ensure tenant retention and drive better returns. Others have simply elected to offload as demand for these buildings remains robust,” he said.

In another office deal, Queensland-based fund manager Arcana Capital, headed by former Queensland premier Campbell Newman, has purchased the Capital Centre at 2-6 Shea Street in Phillip, Canberra, for $17.4 million on an initial yield of 9.2 per cent.

This deal represented a 7 per cent contraction in value from the $18.75 million price at which the building last traded in 2021.

Capital Centre offers 4102 square metres of net lettable area and stands on a 4487 square metre corner site. Tenants include Suncorp, Feros Care, and Aboriginal Hostels.