St Hilliers Property Pty Limited has commenced the major refurbishment of the commercial property at 460 Bourke Street, Melbourne, which was acquired in August last year.    

St Hilliers Property Chief Executive Officer, Tim Casey, said the 13 level building, afforded St Hilliers an opportunity to capitalise on the company's refurbishment and marketing expertise to reposition the property and generate a major uplift in value.

"St Hilliers purchased the building, which has approximately 7,120 square metres of net lettable area, with the benefit of a short term lease providing income flow while the refurbishment project was being set up," he said.

The 460 Bourke Street property has been acquired by St Hilliers for its latest wholesale property fund. St Hilliers Enhanced Property Fund No.3, which has been launched to the market, already has secured two industrial assets in Sydney.  

"The strategy for St Hilliers enhanced property funds is to invest in tenanted properties that provide an immediate income stream and then apply St Hilliers property expertise to maximise the investment value of each asset via refurbishment, redevelopment or repositioning in the marketplace," Mr Casey said.

"Fund No.3 is designed to offer risk mitigated returns to investors that fit between higher risk opportunistic development and lower risk passive ownership of long-term leased property. Our enhanced funds are designed to deliver strong returns with a blend of investment and development returns".

"St Hilliers refurbishment of 460 Bourke Street will deliver a modern working environment with flexible floor plans in a prominent building in Melbourne CBD. The property also benefits from good onsite parking and will appeal to the discerning tenant seeking either single or multiple floor accommodation," said Mr Casey. 

He added that the building, which is located in one of Melbourne's prime areas with a mix of financial, service and legal professions, when fully leased will be an income producing asset with an end value approaching $30 million.

The building will be available for occupation in January 2008. Renowned architectural firm, Gray Puksand, has been engaged to design the extensive refurbishment, which includes fa??üade treatment from the ground floor to level two, a new foyer and retail area, and refurbishment of all other floors.

Colliers International's Associate, Tony Landrigan, who, with Jones Lang LaSalle, is handling leasing negotiations on behalf of St Hilliers, said the property group's strategy appeared to have been vindicated.

"Already Colliers and JLL, as conjunctional agents, have had enquiries, not only from 500 square metre tenants and upwards, but also from tenants looking for upwards of 6000 square metres.

"Due to the timing in the market we believe St Hilliers expectations at the time of purchase last year will be exceeded," Mr Landrigan said.