Mapletree Investments offloads Melbourne office building at steep discount to retail billionaire

[SINGAPORE] Temasek-owned real estate group Mapletree Investments has divested a Grade A office building in Melbourne, Australia, to retail billionaire Solomon Lew for over A$90 million, at a price almost 38 per cent under its reported acquisition price.

Mapletree had bought the St Kilda Road building for around A$145 million in 2017 – the highest ever price for a building in the area, Australian media reported.

The 10-storey freehold commercial building sits on a land area of 6,071 square metres, with a net lettable area of about 20,180 sq m.

According to an advertisement placed by property consultancies CBRE and Knight Frank, it has “significant” development potential of about 48,000 sq m of gross floor area – more than double its current size.

A S$6 million renovation was recently completed for the building, said CBRE and Knight Frank.

Mapletree declined to comment on the divestment when contacted by The Business Times.

The building was the seventh office asset acquired by Mapletree in Australia, and marked its first foray into the Melbourne office market.

Lew is the chairman of Melbourne-based apparel retailer Premier Investment. The company is also the largest shareholder in Australian department store Myer and home appliance maker Breville.

With a net worth of US$2.1 billion, Lew is among the richest people in Australia.

The divestment follows media reports of the property group potentially offloading its Australian office portfolio, which was valued at A$1.4 billion. As at Mar 31, 2025, Mapletree’s assets under management in Australia stood at S$2.2 billion.

The group is reportedly in talks to sell another office block in Sydney’s Macquarie Park to local fund manager Growthpoint Properties Australia. The seven-storey commercial building was acquired by Mapletree for A$106 million in November 2015, a sale price that reflected a yield of 6.3 per cent then, Australian media said.

In March, Australian media also reported that the Temasek-owned real estate investment giant may split any offer of its Australian office portfolio into at least two tranches, to capitalise on different buyer pools.

It was also reported that some individual buildings could be snapped up by private buyers, given that many are suburban assets that could either be repositioned or repurposed.

In its latest annual report, Mapletree noted that demand for office space in Australia remained subdued due to persistent work-from-home trends and the long-term adoption of hybrid work models, high borrowing costs and expanding cap rates affecting valuation figures.

Besides exploring strategic investment opportunities in the US and UK, Mapletree said it was looking to grow its portfolio by expanding into student housing markets in developed areas such as Europe and Australia – “two of the biggest investment markets globally with significant growth expectations”.

On Aug 25, the group made its first acquisition in Australia’s student housing market, with a 1,398 sq m plot of land in Perth. It plans to build a 32-storey building with 835 beds on the parcel, with the project expected to be completed in February 2028. The acquisition cost was not disclosed.

Mapletree added that it was also assessing new locations for its data centre business unit, including prime markets such as Australia.