Lian Beng strikes deal with 11 strata owners to buy Melbourne office for A$51.5m

LIAN Beng Group Ltd has struck a deal with 11 strata owners to acquire a freehold office property in Melbourne for A$51.5 million (S$54.8 million).

The purchase was made through wholly owned unit Lian Beng Realty Pte Ltd, which had entered into 16 contracts of sale with 11 vendors for the proposed acquisition of the property at 50 Franklin Street.

The price tag translates to nearly A$4,500 per square metre based on the net lettable area (NLA) of 11,447 sq m.

Situated in Melbourne's CBD, the 18-storey office building comprises 18 strata lots, which are occupied by one single tenant, Salmat, a marketing company that is moving its headquarters to a Lendlease-owned building at 485 La Trobe Street, ahead of its lease expiring in February next year.

"The proposed acquisition is in line with one of the group's core business activities in property development and investments," Lian Beng said on Tuesday.

"The group views the proposed acquisition as a good opportunity to participate in a strategic investment of the property, where the group can derive rental returns."

Lian Beng will be financing the purchase of the property through bank borrowings and internal resources.

The Australian Financial Review flagged the deal as being rare in Australia, given that such collective deals are more commonly seen in suburban neighbourhoods when a group of home owners club together and sell out for a residential development.

In September, the 11 owners agreed to sell their building, appointing Colliers International along with the property manager Melcorp's Charles Vraca.

Interest in the property came from student accommodation developers, hotel developers, schools, universities, residential developers and office investors, according to a Colliers International broker quoted by the Australian Financial Review.