Investor snaps up CBD building for $17 million

A prominent 10-storey Exhibition Street building occupied and owned by the State Trustees has sold for about $17 million to a private investor.

The freehold building at 168 Exhibition Street in the east end of the CBD was on the market for the first time in 40 years, after selling in August 1972 for $2,775,000.

It has a net lettable area of 6298 square metres and includes basement car parking, as well as ground-floor retail space.

CBRE agents Mark Wizel and Josh Rutman, who negotiated the deal, would not confirm the sale price but said there was strong demand for commercial and retail property under $30 million.

"While incentives in the office sector continue to rise, the significant lack of buying opportunities combined with the record low cost of debt, are spurring investors," Mr Rutman said. There had been interest from local and overseas investors as well as developers.

The new owner intended to refurbish the offices and convert the ground-floor area to retail, Mr Wizel said.

The CBD's north-east was one of the city's strongest precincts, with a vacancy rate of just 3.9 per cent compared with 5.6 per cent for the CBD overall, he said.

State Trustees will relocate to Grocon's $350 million McNab Avenue development next to the Footscray Railway Station when the lease expires, managing director Tony Fitzgerald said.

At present, relatively few substantial properties were being offered to the market.

There were two in Lonsdale Street, however: a six-storey car park at No.380 and a 14-level office at No.388.