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Roxy-Pacific takes 45% stake in A$74.1m acquisition of Melbourne office building

ROXY-PACIFIC Holdings has taken a 45 per cent stake in a joint venture that is acquiring a Melbourne office building for A$74.1 million (S$76.0 million).

The freehold building at 312 St Kilda Rd in Southbank sits on a 1,906 square metre site with net lettable area of about 9,854 sq m, said Roxy-Pacific, a Singapore-listed property developer and investor. It has lower and ground level accommodation, a conference centre, six upper levels of commercial office accommodation and four levels of basement cark parking, and is minutes from Melbourne's central business district.

The acquirers have already paid A$7 million of the acquisition price, which will be financed by internal funds and bank borrowings. The deal will require approval from the Australian Treasurer.

Roxy-Pacific's joint venture partner, which holds the remaining 55 per cent in the investment, is a private family office unit of Tong Eng Group managing director Teo Tong Lim. Tong Eng Group is a Singapore-based privately held real estate developer whose holdings include the 26-storey Tong Eng building in Singapore's central business district.

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Explaining the investment, Roxy-Pacific's board said in the company's announcement that "the property presents a prime investment opportunity and has potential to be a stable source of rental income for the group".

The acquisition will give Roxy-Pacific a second Australian asset in its investment property portfolio after the company sold its full ownership of the 28-storey office building at 59 Goulburn St in Sydney on Oct 16. Roxy-Pacific also has a 50 per cent stake in the 14-storey office building at 117 Clarence St in Sydney.

Roxy-Pacific's other investment property is the Roxy Square mall on East Coast Road, with 49 shop units.

Gross annual income for 117 Clarence St is estimated at S$7.6 million for 2017. The estimated gross annual income from Roxy Square is S$1.8 million.