German real estate fund manager Real IS has bought a suburban office in Melbourne, Australia for between A$73m (€45.6m) and A$75m.

The building at 11 Wilson Street, South Yarra was bought from local developer Vicland in a tight contest that ran over five weeks, including the recent two-week COVID-19 lockdown in Melbourne.

“We have received genuine interest from buyers all over Australia and well as Asia, Europe and America,” said Daniel Wolman, head of investment services at Colliers, the sales agent for the building.

Wolman told IPE Real Assets that he and his team were “inundated with unprecedented demand” from both local and offshore investors for the high-quality, fully-leased asset.

The building is fully leased to a range of commercial tenants providing a long-term weighted-average lease expiry (WALE) of seven years.

“To be able to offer a fully-leased investment in a brand-new high quality building with a long WALE removes so much risk from the market,” said Wolman. “This is what investors are looking for, especially in a market with so much uncertainty based around the COVID-19 pandemic.”

Two years ago, Real IS said it had mandate to create a diversified real estate portfolio in Australia and acquired an office in Adelaide for A$85m.

Real IS Australian Institutional Portfolio Fund had been launched to focus on core office properties in major Australian cities, with the potential to add hotels, logistics and retail assets to its portfolio.

The German company first entered the Australian market in 2005 and today owns nine assets in the country valued at around A$1.5bn.