2 Luton Lane, Hawthorn VIC
Commercial building acquisition
Acquisition date: April 2016
Purchase Price: $37.36 million
Target cash return: 8% p.a. in year 1 growing to 10.5% p.a. in year 6
Target Investor IRR: 12-14%
Investment partner: Trumen Corporation Pty Ltd
The property is located in the premier suburb of Hawthorn in Melbourne’s inner east approximately 6 km from the Melbourne CBD. The locality has access to every amenity including all forms of public transport, extensive retail, nearby freeway networks and recreational facilities. The 5,600m2 modern 3 level commercial office building, constructed in 1990, presents as new having been extensively refurbished in 2012. It has 182 carparks. On acquisition, the property was leased for a further 6 years to Skilled Group Limited (which was taken over by Programmed Maintenance Services Limited in 2015) to 23 April 2022.
The property not only provides strong underlying cashflow to investors but also offers significant development and/or refurbishment potential in the future. Subject to Council approval, it may be possible to add 2 additional levels of accommodation (commercial, student or residential) to the existing building and within the current building code provisions.