A company controlled by the Prince of Brunei, whose family's property holdings have been the subject of boycotts from gay and lesbian groups, has snapped up a city office owned by Victoria University in a $23.6 million deal.
The Singaporean-listed company, backed by Prince Abdul Qawi of Brunei, out-muscled offshore and local buyers to snare the seven-level office used by the university for education and administration purposes.
Prince Abdul is the eight in the line of succession to the Bruneian throne in a tiny oil-rich state, which is surrounded by Malaysia, on the South China Sea.
Forbes ranks Brunei as the fifth-richest nation out of 182, based on its petroleum and natural gas fields, according to Wikipedia.
Brunei's Sultan, the Prince's uncle, owns hotels in London, Los Angeles and Paris that have been the subject of boycotts by gay and lesbian groups protesting against the state's imposition of strict sharia, which advocates stoning for sexual "crimes".
Victoria University's facilities director Gary Carter said the money would be reinvested into education.
The university made a handsome profit purchasing 301 Flinders Lane for $4.8 million in 1998, an average 10.5 per cent return annum over 16 years.
The sale comes 12 months after the university off-loaded the neighbouring 300 Flinders Street campus for $48.5 million to Hotel Grand Central of Singapore.
The sale follows a long list of recent city office and development site acquisitions by offshore groups, which have super-charged land prices and prompted concerns that Melbourne's market is overheating.
Other Singaporean listed companies – Aspial, Fragrance Group, Hotel Grand Central, Hiap Hoe and Chip Eng Seng – have splurged a combined $1.12 billion in the Melbourne market over the past year.
Savills Australia directors Clinton Baxter and Nick Peden, who negotiated the tender sale, said the property sold for a low 5.3 per cent yield and had attracted strong interest from a broad range of local and offshore investors.
The university put the 5690 square metre property on the market with itself as a tenant on a six-year leaseback from settlement and annual rental of $1.26 million.
Prince Abdul, recently appointed to the board of KLW Holdings, said in a statement to the Singapore exchange that the building "will provide immediate cash flow and returns for the group as a mid-term investment with great potential for capital appreciation while having the potential opportunity for future redevelopment".
