"This property presents all the required fundamentals - large corner landholding, reliable income stream and quality improvements."
As Melbourne’s Alfred Health Precinct continues to grow in size and value, one of the more enviable buildings on St Kilda Road is being brought to market in an Expressions of Interest campaign that property agencies Knight Frank and JLL are anticipating big things from.
615 St Kilda Road, known to many as the former Tattersalls building, has been the home to Cancer Council Victoria for the past decade, and is now expected to fetch more than $60 million at sale.
“Dwindling supply of office accommodation on St Kilda Road and its relative rental value compared to other fringe markets all point to strong growth prospects for the precinct,” stated Knight Frank’s Langton McHarg.
Mr. McHarg is promoting the property alongside colleagues Trent Preece and Paul Kempton, in conjunction with JLL’s Josh Rutman, Tim Carr, and MingXuan Li, and they believe that both commercial investors and developers with aspirations for further improvements at the site will be very much engaged with the offering.
615 St Kilda Road, Melbourne VIC 3004
“615 St Kilda Road is an excellent value-add opportunity for savvy investors looking to capitalise on the growth of the surrounding precinct, or for those seeking significant land holdings for future development,” McHarg explained.
The precinct has demonstrated robust drawing power in recent years, with Alfred Health having purchased 545 St Kilda Road last year; that landholding contained two low-rise apartment blocks held by 25 individual owners, who came together to sell the site for a reported $31 million.
Similarly, back in 2020, owner occupier Flight Centre offloaded 436 St Kilda Road to Shakespeare Property Group, securing $62.15 million in the transaction – a near doubling of their 2008 purchase of the building, which cost them $32 million.
“St Kilda Road has evolved into a series of office sub-markets, with 615 St Kilda Road sitting squarely within the Alfred Health Precinct which has seen a great deal of interest and activity in recent years,” stated JLL’s Mr. Rutman.
Several interstate and overseas capital players continue to seek out opportunities in the precinct, with the sale of the neighbouring 607 St Kilda Road for $74.325 million setting a new pricing benchmark for capital values at over $10,000 per sqm on Net Lettable Area. Given the quality of 615 St Kilda Road’s amenity, as well as the desirability of its tenants, the lofty price expectations for the site seem justified by the figures being recorded in adjacent deals.
615 St Kilda Road, Melbourne VIC 3004
Additionally, there’s value in the anchoring tenant operating in the healthcare space; an organisation like Cancer Council Victoria thrives off of long-term security, giving the prospective buyer opportunity for consistent holding income over an extended period. Notably, Diabetes Victoria, another Melbourne-based healthcare organisation, recently sold its long-established city headquarters to a private investor who beat out a range of owner occupiers, investors and developers. It’s clear that the commercial property space is enthusiastic about sites that have similarities to 615 St Kilda Road.
“As we continue to observe a ‘flight to quality’ within investment markets, this property presents all of the required fundamentals – a large corner landholding, reliable income stream and quality improvements which provide for several value-add and repositioning opportunities.”
As The Alfred Hospital updates its facilities by developing the new St Kilda Wing and Inpatient Tower, the precinct at large grows more competitive by the day. The investor holding the keys at the conclusion of this campaign will be planting seeds within one of Melbourne’s preeminent property markets.
