31 October 2025
Melbourne’s beaten down commercial property market has seen a rare receivership sale of a major office holding with Fortis swooping on a Collins Street block for just over $60m.
The sale to the development manager, which is part of the Pallas Group empire, came after receivers KordaMentha were appointed by the ANZ Bank to a company controlled by city investor Malik Suleman in July.
Receiver sales have been rare in this part of the cycle as banks have been lenient with borrowers and many private credit houses have taken an “extend and pretend” approach on soured loans.
The Suleman family, who are best known for running a fresh flower wholesaling business, had been expected to refinance the bank debt but the building fielded surprisingly strong interest.
The sale was handled by CBRE’s Jamus Campbell. Nick Peden, and Scott McGlone and Cushman & Wakefield’s Daniel Wolman, Oliver Hay and Leon Ma.
The agents said the depth of interest in the building showed there was a return in market confidence for Melbourne city office assets as they had 15 offers and the building was inspected more than 60 times.
Fortis forked out $60.35m to buy the building for its clients in what is its first move into the CBD after being active on the city fringe. It is planning a refurbishment to spruce up the lobby, put in top end-of-trip facilities, and offer suites for occupiers, as well as boosting its environmental credentials. Fortis also wants to activate the surrounding laneways, lifting the B-grade office into a city destination.
Fortis head of acquisitions (residential) Victoria and South Australia, Arthur Dendrinos, said the company had commercial assets in Cremorne and South Melbourne.
“This acquisition reflects our confidence in Melbourne’s CBD and our commitment to delivering high-quality, design-led buildings that enrich communities and create enduring value for workplaces and the city.”
The block spans 10,118sq m of space across 16 levels, including ground floor retail, and Fortis can capitalise on its dual frontages to Collins Street and St James Lane. It is also close to Southern Cross Station and major tram lines.
The building is estimated to deliver a net fully leased income of over $5.5m, with strong potential for rents to be boosted via refurbishment. It sits near Melbourne’s legal precinct, luxury retail, and top restaurants.
Mr Suleman bought the tower in 2011 for $30.55m and had planned a redevelopment but it did not go ahead. He is separately looking to sell off a major build-to-rent and rent project in the Melbourne suburb of Spotswood. The project, Union Quarter, has been on the market for about $275m.
There has been a somewhat surprising pick up in Melbourne’s office market as it is still blighted by high vacancy levels. But local buyers are swooping on bargains with buyers including funds manager Bayley Stuart and tycoon Solomon Lew.
They have been buying at the bottom of the cycle on the basis that values in the Victorian capital will recover when foreign buyers return.
