Case Study

541 St Kilda Rd, Melbourne

541 St Kilda Road, Melbourne is an eight-level commercial office building in a prime St Kilda Road location, just south of the Commercial Road intersection and within immediate proximity of the Alfred Hospital.

Comprising secure basement and at-grade parking, ground level retail and office space, and six upper levels of A-Grade office accommodation, 541 St Kilda Road has a total net lettable area of 8,247m² with 126 car spaces.

Project Strategy

Acquire on attractive metrics due to receivership sale, enhance income profile and re-position the asset as a unique and flexible offering with a multitude of uses.

Target IRR

10.0% p.a.

IRR Achieved

23.6% p.a. (24-month project timeframe)

Transaction Analysis from Acquisition to Disposal

Acquisition
Disposal
Purchase Price
$47.75 million
$64.00 million
Sale Date
Jan-17
Jan-19
Net Income p.a.
$3,040,742
$3,289,755
NLA Rate
$7,760/m²
$12,094/m²
Net Yield
6.37%
5.14%

Past performance is not a reliable indicator of future performance.

Background and Opportunity

BSC acquired 541 St Kilda Road in December 2016 and, within the Fund’s life, achieved several incremental gains including:

a
Development of schemes and feasibility options for conversion to hospital and aged care uses.
a
Negotiations for long term leases with several healthcare providers.
a
Enhancement of car park income for an asset that was considered to be 100% leased.
a
Maintenance of 100% occupancy throughout ownership providing for strong distributions.
a
Re-positioning of the asset ensuring it was a flexible building that could support a multitude of different uses.

This case study demonstrates BSC’s proven ability to identify and secure an appropriate asset within a target market, set and implement a strategy of incremental gains, and achieve an outstanding outcome in a short timeframe.