After a combined 40 years of ownership, two well-known Melbourne CBD buildings are being brought to the market via an international sales campaign. 
 
The assets will be offered together or individually via an International Expressions of Interest campaign being handled by CBRE Melbourne Middle Markets agents Josh Rutman, Mark Wizel, Lewis Tong and Kiran Pillai in partnership with CBRE Hotels agents Rob Cross and Scott Callow.
 
Mr Rutman commented on the sale opportunity: “Melbourne has become a truly international city and this has seen a major uplift in investor demand for mixed use assets, particularly with hotel components that can take full advantage of the current tourism boom. We expect to see a great deal of local and offshore interest for the assets, especially given the scale and quality provided by the portfolio.”
 
The immediate precinct has benefited from strong recent transaction activity, with a multi-storey car park and office at 114 Flinders Street selling to a Hong Kong investment group HK Realway for about $120 million and a circa 5% yield.
 
Mr Wizel commented: “We are currently dealing with several offshore purchasers who are interested in acquiring mixed real estate assets, similar to those that they own in their domestic markets. These properties would certainly fit into this category, and based on our recent experience with a property in the precinct, we expect particularly strong interest to come from mainland China, Hong Kong, Indonesia and Singapore.”
 
The Adina comprises a 65-room hotel which is fully leased to international operator Toga Far East Hotels until 2021 with no further options. It also features an 88-vehicle car park, a recently refurbished IGA supermarket and a substantial rear parcel of land, which connects to Flinders Lane and Duckboard Lane. The warehouse property is home to the iconic laneway whisky bar Eau De Vie and additional warehouse style hotel rooms. 
 
Mr Wizel added: “Given the premium location and a secure lease in place with a clear end date, there is an opportunity to simply own the property for the long term, with the option of reconfiguring the building, constructing additional floors or converting for alternative uses such as residential, subject to relevant approvals.” 
 
The 2 Russell Street property, located on the corner of Flinders Street opposite Federation Square and the Forum Theatre, is a landmark CBD corner holding comprising a nine level office tower and the recently upgraded, multi-level Duke of Wellington pub. The pub is 100% leased to Dixon Hospitality with a highly favourable 3am liquor licence. 
 
Established 1853, The Duke is Melbourne’s oldest licensed pub - named after Field Marshal Arthur Wellesley (aka the Duke of Wellington). Wellesley famously led the British forces to defeat Napoleon in the Battle of Waterloo in 1815 and went on to become British Prime Minister in 1828.
 
With frontages to Russell and Flinders Streets, the property also has major exposure to Oliver Lane, which has recently transformed into one of Melbourne’s quintessential hospitality laneways, being home to powerhouses Coda and Lucy Liu.
 
The office tower at the rear of the pub features fully self-contained whole floors with three sides of natural light and sweeping protected views over Federation Square, Birrarung Marr, the Yarra River and the Botanic Gardens. It is currently tenanted by a range of technology and design companies
 
Mr Rutman commented: “Melbourne’s eastern core is currently experiencing a significant shortage of office space and we envisage that, if positioned correctly, 2 Russell Street can take full advantage of the rental uplift that owners are seeing for similar assets in the precinct.
 
“The property also presents a very real opportunity for strata subdivision or conversion, residential accommodation, subject to relevant approvals.” 
 
The portfolio, known as the East End Selection, is being offered for sale by International Expressions of Interest closing on Friday 27 October 2017.

Phone or email Mark Wizel or Josh Rutman from CBRE via the below contact details for more information on the sales process.

See also:

Tankerville Arms, renowned Fitzroy hotel for sale

Lygon Street’s East Brunswick Hotel is for sale

BMW to sell flagship Melbourne CBD showroom paving the way for new hotel development

Get to know Rob Cross, CBRE Hotels