Straits Real Estate makes first Aussie acquisition

Straits Real Estate makes first Aussie acquisitionSingapore-based Straits Real Estate has purchased a high-quality office tower at 114 William Street in Melbourne for $125 million from private developer and investor Kyko Group.Located on the corner of Little Collins and William streets in the heart of Melbourne’s legal district, the property has a net lettable area of 21,025 sqm.The sale represented a capital value of around $5945 per sqm, and a fully leased initial yield of approximately 7.27 per cent.Kyko held the building for around seven years after buying it from superannuation fund-backed ISPT for $95 million.An active developer, Kyko has been selling off assets in the last few years, including two towers near Sydney’s Hyde Park to Singaporean developer Far East Organisation for $127 million in 2013.Straits Real Estate was incorporated in November 2013, with 10.5 per cent owned by the John Lim Family Office. Lim has been named on Singapore’s Forbes Rich List for four years in a row.The sale was negiated by Colliers International’s Nick Rathgeber and Leigh Melbourne.Rathgeber says the “incredibly competitive campaign” saw “extensive bidding from experienced domestic and offshore investors.”114 William is only the second institutional-grade Melbourne office investment to transact in 2015, following the sale of 575 Bourke Street.Both assets have been purchased by Asian institutional investors, which Rathgeber says exemplifies the “unprecedented weight of buy-side offshore capital.”