Case Study
541 St Kilda Rd, Melbourne
Jan 2017 Purchase Price
$47.75m
Jan 2019 Disposal Price
$64.00m
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)
(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 | $5,791/m² | $7,760/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:- Development of schemes and feasibility options for conversion to hospital and aged care uses.
- Negotiations for long term leases with several healthcare providers.
- Enhancement of car park income for an asset that was considered to be 100% leased.
- Maintenance of 100% occupancy throughout ownership providing for strong distributions.
- Re-positioning of the asset ensuring it was a flexible building that could support a multitude of different uses.
