The biggest Melbourne CBD retail deal in two years has been done by a buyer from out of town.
Sydney-based Coombes Property Group has acquired Midtown Melbourne at 246 Bourke Street from IFM Investors for $154 million, the largest CBD retail transaction since 2024. It is the group’s first major Melbourne acquisition in a portfolio that has been concentrated in Sydney, Brisbane and Darwin since 1978.
The price came in below the $165 million guide set when the asset was launched in September by ISPT, now a subsidiary of IFM Investors. For a privately-held Sydney group with no prior Melbourne exposure, that gap is the story - capital is moving south to find pricing that no longer exists at home.
A trophy corner
Midtown sits on a 2,787sqm site at the corner of Bourke and Swanston streets, with 15,233sqm of retail and office space across nine levels and frontages to Bourke, Swanston and Little Bourke streets. More than four million pedestrians pass the corner annually.
Originally developed in the 1930s as a Foy & Gibson department store, the building was acquired by ISPT on behalf of its Core Fund in 2007 and progressively refurbished. It is anchored by HSBC, Chemist Warehouse, Daiso and W Cosmetics, with Japanese retailer MUJI signed to a 10-year lease from 2027, replacing the existing Telstra store, and is producing circa $13 million in fully leased net income.
A heavily contested process
The campaign was run by Cushman & Wakefield’s Oliver Hay, Trent Weir, Leon Ma and Daniel Wolman, drawing 125 enquiries and 13 offers - one of the deepest bids for a Melbourne CBD retail asset in recent memory.
Weir said the outcome reflected both the quality of the corner and the strength of the MUJI leasing deal. “Midtown is one of Melbourne’s most recognisable CBD retail corners. The strength of the result reflects the quality of the location, the diversified income profile and repositioning of the retail offering,” he said.
Co-agent Oliver Hay had earlier pointed to the underlying fundamentals supporting the bid. “If you look at the Bourke Street Mall and the vacancy rate in that civic centre, it’s dropped to less than 4 per cent, which is as low as retail has ever been in that precinct,” Hay told the Australian Financial Review at launch.
The Sydney read on Melbourne
Coombes’ arrival changes the conversation. While much of the past 18 months has been characterised by domestic institutions trimming Melbourne CBD exposure, this transaction makes the counter-case: that a private Sydney group with deep market knowledge is willing to commit $154 million to a Melbourne trophy at this point in the cycle.
The group already controls 46 Market Street, 68 York Street, One Hurstville Plaza and The Exchange Bondi Junction in Sydney, and 79 Adelaide Street and 99 Creek Street in Brisbane, and was appointed alongside Mirvac and Lendlease as a development and delivery partner for the Hunter Street Station precinct as part of the Sydney Metro West project in late 2025.
For Melbourne vendors who have been waiting for a benchmark print to test the market, Midtown is it. For Sydney-based private capital watching from across the border, it is a clear marker that the southern capital is now open for business.
Asset management
MA Financial Group advised Coombes on the acquisition and has been retained to provide ongoing asset and property management services. Head of core real estate Chris Lock described Midtown as a compelling repositioning opportunity as Melbourne’s CBD and Bourke Street Mall precinct continued to recover and regenerate, with the group managing approximately $4.5 billion in retail and office assets.
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