Melbourne Market Shows Signs of Life as Spotlight Group Buys Toorak Complex for $131M

Melbourne’s beleaguered commercial property market is showing signs of recovery, with the Victoria capital recording what is said to be its biggest office deal so far this year with a reported A$185 million ($131 million) sale of a property in the inner suburb of Toorak. 

Melbourne developer Vicland Property Group sold St Germain, a 12-storey mixed-use complex that received a 2024 Victorian Architecture Awards commendation for its design, to Spotlight Property Group, the real estate arm of Aussie retail giant Spotlight Group Holdings, after the 2023-built project had hit the market last May at a guide price of A$200 million.

The sale of the Grade A development comes as deal volume in Melbourne’s office segment climbed 14 percent to A$1.8 billion in 2025 after a 9 percent drop the previous year, according to MSCI’s Australia Capital Trends report.

“Investor appetite for Melbourne assets remained lacklustre, although office transactions showed early, albeit limited, signs of renewed activity after a prolonged period of inactivity,” the data provider said.

Affluent Inner East

Located at 505 Toorak Road in the affluent area 7 kilometres (4.3 miles) east of Melbourne’s central business district, St Germain was developed by Vicland, the local builder led by businessman Bill McNee, and spans 13,095 square metres (140,953 square feet) of net lettable area, consultancy Cushman & Wakefield said Monday in a release. 

Now fully occupied, the building’s tenants include real estate agency Kay & Burton, jeweller Kennedy, wellness centre Saint Haven and supermarket Coles, with a weighted average lease expiry around seven years.

A sale at the reported price implies a value of A$14,128 ($9,990) per square metre of net lettable area. St Germain was marketed by Cushman & Wakefield’s Daniel Wolman, Nick Rathgeber, Oliver Hay, Leigh Melbourne and Leon Ma.

The complex was fully leased before practical completion and has maintained a tenant wait list, standing in contrast to elevated vacancy levels across parts of Melbourne’s CBD and fringe markets, according to the consultancy.

“This is arguably one of the best mixed-use commercial buildings in the country,” said Wolman, Cushman & Wakefield’s co-head of Victoria investment sales. “The design quality, ESG performance, strength of covenant and the Toorak catchment combine to create a genuinely scarce offering.” 

With the St Germain complex dominated by nine floors of office space, the acquisition will join a Spotlight Property Group portfolio led by the group’s retail centres, which host stores for the group’s Spotlight, Anaconda and Harris Scarfe chains. Helmed by executive deputy chairman Zac Fried and his uncle Morry Fraid, the family-held group is believed to be Australia’s fourth-largest retail conglomerate.

With around 150 Spotlight superstores across Australia, New Zealand, Singapore and Malaysia, the group is also a landlord for brands including Woolworths, Bunnings, Coles, Aldi and Dan Murphys, according to its website. 

Singapore’s TCA Returns

With office towers in Sydney and shopping centres in Sydney and Brisbane dominating 2025 deal volume in Australia, Melbourne’s biggest office trade of last year came courtesy of low-key Singaporean investor TrustCapital Advisors.

TCA acquired 750 Collins Street in the Docklands area from ASX-listed GPT Group for A$383 million in a transaction announced in November, with the buy ranking as the country’s 15th-largest single-asset deal of the year as tracked by MSCI.

The property changed hands at a yield of 6.6 percent in one of TCA’s first big moves back into Australia’s office sector after selling much of its holdings there in 2017, including a five-asset portfolio worth more than A$700 million.

Total transaction volume in Australia’s commercial property market reached A$49.8 billion last year, rising 6 percent and marking a second straight annual increase for the first time since 2019, per MSCI. Sydney office led all segments with a 46 percent surge to A$7.8 billion.