Boutique developer CostaFox has acquired South Melbourne’s landmark Tea House building for $28 million.
The heritage-listed former factory and warehouse, located at 28 Clarendon Street, Southbank, has a net lettable area of 3,250s qm and occupies a large site of 2,948 square metres.
The off-market sale of the six-storey building, which has been largely vacant for several years, was brokered by CBRE’s Lewis Tong, Mark Wizel, Josh Rutman and Scott Orchard on behalf of a Melbourne-based investor.
Located adjacent to Crown Casino and the Melbourne Convention Centre, the "Robur Tea Building" was constructed in 1888 by James Moore and John Grainger for a printer and stationery manufacturer, and was once one of the tallest buildings outside the CBD.
CostaFox managing director Michael Fox said the company was "elated" with the acquisition, considered one of the most prominent examples of a 19th century warehouse in Melbourne.
"To buy a site like this in this location with such a beautiful heritage building is difficult at the best of times," Fox said.
"We plan to restore the building to its former glory.”
The task won't be an unfamiliar one for Fox, who won the Australian Property Institute Heritage Property Award in 2014 for his redevelopment of the old Tip Top Bakery site in East Brunswick.
CostaFox development director Geno Hubay said the hunt was on to find a firm to help realise the company's vision for the Nahum Barnet-designed building.
"We have commenced a worldwide search to find the best architects to help us bring Melbourne’s Tea House building back to life,” Hubay said.
CBRE’s Lewis Tong said the property had attracted interest from several parties, in an indicator of the positive investor sentiment in Melbourne’s sub-$100 million office sector.
“Being Melbourne’s first major office transaction for 2020, the metrics of this sale provide a sound reflection of ongoing buyer confidence in the Melbourne office market,” Tong said.
Positioned on the southern side of the Yarra, the asset is well-positioned to capitalise on Melbourne CBD's historically low office vacancy rates of 3.2 per cent, with the city fringe increasingly being considered as an alternative for large corporations.
“Melbourne CBD and city fringe office buildings with attractive fundamentals are well-positioned to achieve strong pricing outcomes due to the strength of tenant demand and subsequent rental growth prospects,” Rutman said.
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