News release

St Kilda Road office building sells following heated competition

JLL together with Cushman & Wakefield sell a major office building at the southern end of Melbourne’s St Kilda Road to Sydney-based fund manager

November 25, 2021

MELBOURNE, 25 November 2021 – An office building in Melbourne’s city fringe has sold for around $75 million, as the resurgence of the St Kilda Road and the fringe office market escalates.

JLL’s Executive Director and Head of Capital Markets – (Victoria) Josh Rutman, Associate MingXuan Li and Director Simon Quinn in conjunction with Cushman & Wakefield brokered the deal for 607 St Kilda Road via an international Expressions-Of-Interest campaign.

An independent fund manager purchased the building on an initial yield of 4.23% and a building NLA rate of more than $10,000 per sqm.

Only one other asset over $50 million has transacted in the tightly held St Kilda Road precinct in over 24 months, according to JLL Research. 436 St Kilda Road was sold by Flight Centre Limited for approximately $62.15 million in Q2 2020, to Shakespeare Property Group.

The fringe supply pipeline remains strong with 19 projects currently under construction, which are expected to deliver 213,520 sqm of new stock to the market through to late-2023. JLL is also tracking an additional 37 projects with plans approved and 22 projects with plans submitted, which has the potential to add over half a million sqm to the fringe pipeline over the medium term.

The metropolitan investment activity recorded subdued results over Q3 2021 with three office transactions (>$5 million) recorded across both markets, totalling $293.6 million. Two of these transactions occurred in the fringe market, both being newly completed office assets, 101 Moray Street, South Melbourne and 11 Wilson Street, South Yarra.

Mr Rutman said, “It’s little wonder why assets are seeing such a depth of interest as the office investment market in Melbourne has been starved of opportunities in 2021, with only one commercial building above $50 million changing hands in St Kilda Road in the past 24 months. The activity from private and institutional capital in the office market further reinforces the contention that the office is here to stay, even if that means that nature of the workplace is evolving.”

“St Kilda Road’s currency has evolved as tenants look to base themselves close to the CBD and within walking distance of green open spaces and the future Anzac Station,” Mr Rutman said.

Situated on a tree-lined boulevard south of the Melbourne CBD, 607 St Kilda Road is located on the eastern side of St Kilda Road, between High Street and Dandenong Road. At the other end of St Kilda Road (northern end), the new transport hub of Anzac Station is set to boost activity for office occupiers, due for completion in 2025.


About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion in 2020, operations in over 80 countries and a global workforce of more than 95,000 as of September 30, 2021. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.