First major office deal of 2023 signals confidence in CBD market

An outmoded CBD office building has been sold for $30 million after competitive bidding from investors based in China, Singapore, Hong Kong and Australia, in a clear sign of investor confidence in the Melbourne CBD commercial property market.

The 12-level property at 99 Queen Street fetched almost $7000 per square metre for its former private owners, who had held it in their portfolio for 17 years.

The purchaser is a mainland Chinese investor and first-time entrant into the Melbourne CBD market.

More than 200 buyer enquiries about the property were received by JLL’s Melbourne CBD sales agents Josh Rutman, Nick Peden and MingXuan Li, who handled the expressions of interest campaign. Thomson Geer’s Eu Ming Lim was acting solicitor on the deal.

Rutman, executive director and head of capital markets for Victoria, said the first major office deal of 2023 was a good litmus test, and signalled investor confidence in the medium-term outlook for the Melbourne CBD commercial property market.

“There’s no doubt that transaction volumes in the Melbourne CBD are lower than the long-term average, however, this deal is evidence of the value that offshore groups are seeing in well-located assets – even if they require substantial upgrades,” Rutman said.

He said demand from investors for secondary office assets in the CBD appears to be intensifying, with many buyers looking for unrefurbished buildings that…