Embattled travel agency Flight Centre has sold its Victorian headquarters for $62.15 million to the Shakespeare Property Group.
The cash-strapped retailer said the sale of its St Kilda Road property in Melbourne will be completed in July 2020.
Paul Burns, Fitzroys director who brokered the off-market transaction with Shakespeare Property Group, the property arm of boutique investment manager Prime Value Asset Management, said numerous parties made offers to buy the asset.
“Ultimately, the deal was negotiated in an abbreviated timeframe and subject to a very short due diligence,” the property firm stated.
Flight Centre said it would lease back 75 per cent of the property it had acquired for $32 million in 2008 as it has long-term occupants.
The 11-storey glass tower has a net lettable area of 7506sqm and is on a 2317sqm site opposite Fawkner Park.
Five tenants occupy the fully-leased building, including Flight Centre and soccer’s state governing body Football Victoria.
According to Burns, while in some areas of the market COVID-19 has brought a “wait and see” approach among buyers, securely-leased investments remain highly sought after as cashed-up investors are more motivated to set themselves in bricks and mortar with income.
“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,” Burns said.
He said investors have been actively pursuing St Kilda Road buildings with value-add and repositioning potential, looking to take advantage of Melburnians’ increasing preference to live, work and play across the inner city.
“My understanding is that SPG sees 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.”
Anzac station is part of the $11 billion Metro Tunnel project and is due to open by 2025, complementing multiple tram routes at the doorstep of 436 St Kilda Road and at Domain Interchange close by.
The building is also metres from Albert Park Lake and the Royal Botanic Gardens.