Hotel Grand Central to sell office building in Australia for A$80.8 million

HOTEL Grand Central (HGC) has reached an agreement to sell an office building in Melbourne for A$80.8 million (S$77.1 million), it said on Monday (Feb 7).

The property was purchased in 2013, with a 7-year lease to the then-vendor, Victoria University, for A$51.45 million (including stamp duty). Victoria University occupies the entire property as tenant and currently pays a rent of about A$5.36 million per year, plus outgoings. The tenancy, which was extended, expires in October 2022.

300 Flinders Street is a commercial building comprising a basement, ground level and another 19 levels across 3 subdivided lots - Lot S2 (a car park owned by third parties), Lot S3 and Lot C1 which is common property owned equally by Lots S2 and S3.

The lettable area within Lot S3 comprises 13,457.5 sq m of office space and 636 sq m of retail space, plus other related areas and common property.

The buyer, an unnamed third party, has paid a deposit of A$4.04 million.

In a filing to the Singapore Exchange, Hotel Grand Central said the proposed sale transaction allows it to realise its investment in the commercial building before the tenancy matures in October.

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It added: "The net sale proceeds, after payment of related transaction costs, shall be placed into interest-bearing bank term deposits, pending a decision by the directors on future investment opportunities."

The counter closed at S$1.02 on Monday, down one cent or nearly 1 per cent.