The purchase of 11 Queens Road, Melbourne, from Vantage Property is the first by their new Shor Property + Development operation.
A new property consortium including Square Peg Capital’s Justin Liberman and Paul Solomon of the Moose Toys empire has swooped on an office building on Melbourne’s Queens Road for a price industry players put at about $26m.
Mr Liberman is well-known for co-founding technology venture capital giant Square Peg Capital with Seek’s Paul Bassat, Tony Holt and Barry Brott, and has also backed property projects in Victoria via his Jagen business.
The purchase of 11 Queens Road from Vantage Property is the first by their new Shor Property + Development operation. It now plans to buy up more sites to become a much larger player while the state’s market is at a low ebb.
Wealthy investors have been snapping up bargain properties while many offshore institutions have taken an “anywhere but Melbourne” stance towards the city because the state is weighed down by high taxes.
Shor Property is buying the office building that sits near the city’s beaten down St Kilda Road boulevard, betting that the wave of residential conversions in the area will support a comeback in the precinct. Buyers in the area have included tycoon Solomon Lew and Fawkner Property. Shor Property also includes Leaf Corporation’s Adam Rogers and former real estate agency director Steve Fein. They are already working on more sites because they see an opportunity to make counter-cyclical investments in Victoria.
They see strong potential in the building at 11 Queens Road as it overlooks Albert Park Lake, and works well as offices but could become the site for luxury apartments in the future.
The 2326sq m site houses a 12-storey office building with ground-floor retail, dual street frontages onto Queens Road and Queens Lane, and two basement parking levels.
Justin Liberman of Square Peg Capital, right, is backing Shor Property + Development. Picture: Stuart McEvoy
Shor Property plans to hold the site for the medium-to-long-term. It will first stabilise the recently refurbished asset and look to attract more tenants.
In a nod to the wave of apartment building on both St Kilda Road and Queens Road, it will assess residential conversion options over the longer term. A series of office-to-residential conversions along Queens Road are underway, with neighbouring sites including build-to-rent developer Home and residential developer Orchard Piper.
Planning controls provide for a discretionary height limit of 20 storeys, offering significant upside should an apartment conversion be pursued.
The consortium plans to take on more sites under the Shor Property + Development brand, with a focus on value-add office and retail assets, as well as commercial sites with longer-term development potential.
Shor Property’s counter-cyclical strategy will be centred on acquiring assets below peak-cycle values and undertaking strategic planning and rezoning processes to unlock their highest and best use.
While deal terms remain confidential, a spokesperson confirmed the asset changed hands on a short settlement.
Oliver Hay of Cushman & Wakefield, who brokered the deal alongside colleagues Daniel Wolman and Leon Ma, said buyer appetite for Melbourne office assets was strengthening, particularly from private groups and syndicates seeking counter-cyclical opportunities.
“The level of inquiry on this campaign reflected a growing cohort of sophisticated private investors looking to secure well-positioned office assets at a point in the cycle where they can see both immediate value and longer-term optionality,” Mr Hay said.
Mr Wolman said the purchaser held a conviction around the evolution of the Queens Road precinct and the ability to acquire a prominent holding with multiple future pathways, via repositioning, stabilisation or an eventual residential conversion.