State Government Looks to Offload Former Supreme Court Building in $25m Sale

Why It Matters

The transactions signal renewed confidence in Melbourne’s fringe office, hospitality and institutional real‑estate, boosting local employment, property values and cross‑state capital flows.

Key Takeaways

• Sydney buyer pays A$8.6 m for fully‑leased Fitzroy office.
• Historic Fitzroy pub sells for A$6.55 m after vendor bid.
• NSW investors account for 57% of 2026 fringe deals.
• University of Melbourne acquires former call centre for A$17.8 m.
• Queens Parade shop fetches A$945k, yielding 4% return.

Pulse Analysis

Melbourne’s city‑fringe office market is showing signs of renewed vigor after a prolonged lull. The recent A$8.6 million (US$5.7 million) purchase of the 35 Rose Street building, fully leased at a 6.1% yield, marks only the fifth such transaction in the past three years, according to Stonebridge. The scarcity of fully‑occupied assets has traditionally deterred investors, but a surge of interest from New South Wales capital—accounting for 57% of 2026 fringe deals—suggests confidence in the flatter Melbourne market and a willingness to accept modest risk for stable cash flow.

Hospitality and retail assets are also benefitting from the same investor optimism. A historic Fitzroy pub, built in 1849, changed hands for A$6.55 million (US$4.3 million) after a vendor bid, while a 120 sq m shop on Queens Parade sold for A$945,000 (US$624,000) delivering a 4% yield. Both transactions highlight the premium placed on well‑located, character properties with existing fit‑outs and liquor licences. The influx of capital is expected to accelerate the precinct’s gentrification, supporting new cafés, delis and boutique retailers.

The University of Melbourne’s acquisition of the former Save the Children call centre for A$17.8 million (US$11.7 million) illustrates how institutional buyers are leveraging real‑estate to meet strategic growth plans. The campus will house arts faculty by mid‑2027, reinforcing the university’s role as an urban anchor and catalyst for surrounding development. This move mirrors broader state‑government asset disposals, such as the planned A$25 million (US$16.5 million) sale of the former Supreme Court building, indicating a policy shift toward monetising surplus properties. Together, these trends point to a more dynamic, cross‑sector investment landscape in Melbourne.