Stamoulis Group buys Collins St tower for $192m amid market challenges

Melbourne’s tough office market has seen the first sale for more than $100m this year. The buyer is well-known real estate player.

Tycoon Harry Stamoulis has bought 357 Collins Street, Melbourne

Tycoon Harry Stamoulis has shown his property smarts, tying up a deal to buy a major Melbourne office block on blue-chip Collins St for about $192m, with the Singaporean vendor citing challenging market conditions.

Mr Stamoulis in April emerged at the head of the contest to buy the 357 Collins Street office block from a Singapore-listed offshoot of developer Frasers. He beat early interest from cryptocurrency billionaire Ed Craven.

Stamoulis Property Group was represented by Paul Henley’s OneEast Capital. The tycoon was drawn to the 25 storey A-grade asset in the heart of Collins Street due to its high level of amenity and the fall off in values after interest rates were hiked.

The purchase adds to his collection of buildings that were picked up in the trough of the city’s office cycle, after last year buying a building from a Charter Hall-run trust for about $155m.

The Singapore-listed Frasers Logistics & Commercial Trust put the sale price at $195.3m. The amount payable by the tycoon after netting off the outstanding tenant lease incentive liabilities will be $192.1m.

In a sign that even Melbourne’s tough office market is stabilising, this was a 0.6 per cent premium to the last independent valuation, and bodes reasonably well for other towers hitting the market. AEW Capital Management is selling 31 Queen Street and a series of buildings are on the block along St Kilda Road.

However, in a reflection of the cooling of international capital on Victoria, the Frasers-run trust said the sale was a move to “strategically exit” the challenging Melbourne office CBD market.

The Singaporean company said the Victorian capital “continues to suffer from remote work culture, leading to an elevated vacancy level of 18.6 per cent in Melbourne”. “Subdued tenant demand has also resulted in rising incentives,” it added.

Mr Stamoulis and his family have a fortune estimated at $797m. He is the son of the late Spiros Stamoulis, who started Gold Medal soft drinks in the late 1960s and sold out to Cadbury-Schweppes in 2004. The younger Stamoulis is known for building a $70m mansion in Melbourne’s Toorak, and also has a Gold Coast apartment project at Main Beach.

Cushman & Wakefield handled the sale of the Collins St office tower. It last changed hands in 2014 when Singapore-listed Frasers Centrepoint, controlled by Thai tycoon Charoen Sirivadhanabhakdi, carved the tower out of its commercial holdings and sold it to the Frasers Commercial Trust for $222.5m.

Originally published as Stamoulis Group buys Collins St tower for $192m amid market challenges