Peak Equities has snapped up the Camberwell Junction headquarters of Australian Pharmaceutical Industries, paying $27.5 million for the leasehold property.
The deal follows the sale of the Country Fire Authority's headquarters in the Tally Ho business park which fetched $18.08 million.
The private arm of Singapore-based Tong Eng Group bought the three-level office building at 8 Lakeside Drive on a high passing yield of 9.38 per cent.
The 4552-square-metre office building is fully leased to the CFA (99 per cent) and Telstra, returning $1.69 million a year but only 2.5 years remain on the lease.
Dawkins Occhiuto agent Andrew Dawkins said "While the passing yield was unusually high, it reflected the over-let nature of the passing rent and the short WALE remaining to essentially a single tenant."
"Buyers realised that while the CFA is likely to stay and renew its lease, the building would be relatively easy to lease to single or multiple tenants even if they left," Mr Dawkins said.
Mr Dawkins brokered the deal for the Kador Group with colleagues Walter Occhiuto, Chris Jones and Colliers International agents Peter Bremner, Rob Joyes and Rachael Clohesy, who also negotiated the API Camberwell deal.
API's headquarters at 250 Camberwell Road was also slightly handicapped. The Melbourne Anglican Trust Corporation holds a lease on the property until September 2075. Nonetheless, the deal was struck on a 7.5 per cent yield based on a six-year WALE (weighted average lease expiry).
"If the property was sold with a freehold title, it would most likely have resulted in a sub-6 per cent yield," Mr Bremner said.
The vendor, Bricktop Group, bought the property in 2013 for $20.4 million. The five-level 5420-square-metre building returns more than $2 million a year in rent from API and a ground-floor cafe.
Mr Joyes said the vacancy rate in the inner eastern suburbs was down to 4.95 per cent and there is very little space bigger than 4000 square metres in the market.
"Rents for A-grade space will soon get to $440-$450 net. There's only one speculative project on the market in the next 24 months," he said.
Blueprint Projects' mixed-use CV project at 153 Camberwell has 8000 square metres of office space, which several potential tenants are considering, he said.
The hot suburban office market stretches as far as Frankston, 40 km south of Melbourne's CBD. A private investor-developer has paid $13.56 million for the two-storey head office of national education provider Pragmatic Training. CBRE agent Sandro Peluso executed the deal on behalf of the Farmer Group of Companies.
The 3718-square-metre building attracted nine bids from locals and offshore investors. Pragmatic Training had recently signed a new eight-year lease.
The next major test of office markets outside the CBD will be 187 Todd Road, Port Melbourne, a four-level office building built for Boeing Industries nearly 20 years ago, and previously occupied by Kraft Foods.
Syndicator Terraplex is selling the property which is opposite the state government's recently acquired General Motors site.
The building has five tenants including Wesfarmers' Workwear Group, Emirates Retail Leisure and George Weston Foods. It returns about $2.68 million in rent and is expected to fetch more than $40 million.
The agents from Colliers International and Dawkins Occhuito have been appointed to sell it.
