Buyer found for historic Melbourne riverside office

The owner of an early 20th century textiles warehouse that had been converted into an office building was looking to divest the property.

The building sits characterfully on a 4,389 square metre block of land on the banks of the Yarra River, on Trenerry Crescent, in the Melbourne suburb of Abbotsford. The property was in clear need of refurbishment. However, as a relic of the Art Deco movement, it was heritage listed and so any plans for a spruce up would be restricted to protect its original features.

There was also a mandate attached to the property for unobstructed views of the Yarra River.

JLL was appointed as a joint agent to find a new owner for the historic site. We faced the reality that the office building’s three-year vacancy would put doubt in the minds of potential buyers, given that interest rates were rising, funding was difficult to obtain, and overall market confidence was low.

We worked closely with our client – the building’s owner – and our co-agent, the locally-based, Vinci Carbone, through a comprehensive buyer identification process. The conclusion was that an owner-occupier would be the most suited potential buyer. The problem was there weren’t many $30 million-plus owner-occupiers in the market at the time.

To shape the marketing strategy, we delved into the building's history, recognising the importance of its brand in shaping buyers’ perceptions. One of the first moves was to reinstate the original name of the property to Yarra House. Our investment sales team created a video highlighting the opportunities, as well as the challenges, of the asset and what could be done by the eventual buyer to mitigate risks. This helped foster transparency and trust among the target buying group.

Our investment agents teamed up with our project and development services specialists to create a cost analysis for refurbishing the building’s floors and converting the basement car park into office space, as well as other ways to unlock value in the property. Additionally, our office leasing colleagues secured preliminary leases, knowns as heads of agreement, from potential tenants, highlighting tenant interest and countering concerns about the building's vacancy. By introducing these tenants to active buyers, the team eliminated concerns of the property’s long-standing vacancy.

JLL’s proprietary AI buyer identification platform, Horizon, also played a pivotal part in generating interest. By analysing the property's credentials and leveraging trend data, the platform identified potential buyers based on their previous market activity. With a global dataset, the team was able to identify a wide range of active investors worldwide, expanding the pool of potential buyers.

Our sales strategy encompassed deep insights, data research, technology platforms, and creative marketing, resulting in a bidding war that drove the property’s price well beyond market expectations.

And what better measure of success than repeat business, which promptly happened when the client hired JLL on its very next property sale.