Hotel Grand Central Limited to purchase Melbourne lot for A$48.5m

Diversifies firm's Australian investments to commercial.

Hotel Grand Central Limited (HGC) through its wholly owned subsidiary, Grand Central (Richmond) Pty Ltd has entered into a sale and purchase agreement on 5 September 2013 to acquire Lot S3 of the 300 Flinders Street building for A$48.497 million plus GST.

300 Flinders Street is a commercial office building comprising basement, ground level and a further nineteen upper levels embracing three units of subdivision, namely Lot S2 (a car park owned by third parties), Lot S3 and Lot C1 being the common property which is owned in equal parts by Lots S2 and S3.

The property is being purchased with a seven year lease back to the vendor operating as Victoria University. The vendor, who will occupy 100% of the property as tenant shall pay rent at 8.3% of the purchase price of A$4,032,000 per annum plus outgoings in the first year. The tenant shall pay fixed rent increases of 3.5% per annum commencing from the second year to the seventh year of the lease term.

HGC said that the proposed acquisition will enable it to diversify its investments in Australia to the commercial market in Melbourne, Australia.

The purchase will be financed by the purchaser's own funds and bank borrowings.