Canada’s Manulife Real Estate has bought an office tower in Melbourne from a Lendlease wholesale fund and Savills Investment Management for around AUD300m (€195m).

The Lendlease-managed Australian Prime Property Fund (APPF) jointly owned the building with Savills.

The asset is located at 800 Collins Street in Melbourne’s Docklands, an extension to Melbourne central business district.

Lendlease announced the sale, without naming the buyer or mentioning the sale price.

But sources close to the owners told IPE Real Assets that the buyer is Manulife Real Estate, which is making its entry into the Australian office market.

When the building was put to market in October, marketing agents indicated that it would fetch at least AUD270m.

A source said today: “The sale price is closer to AUD300m.”

Lendlease will continue to manage the building, which houses the head office of Myer, a department store retailer.

Josh McHutchison, managing director of Lendlease Investment Management, said: “Melbourne continues to increase its global importance as a high-performing business destination, as demonstrated by the strong interest this asset received.”

McHutchison said the sale of 800 Collins Street continues the fund’s portfolio re-balancing strategy to focus on flexible and sustainable precincts that benefit from excellent transport links and access to public green space.

Savills Investment Management’s Australian head of investment, Lee Tredwell, said the sale was the culmination of the joint owners actively repositioning the asset to attract a new high-profile tenant on a long-term lease.

He said the office now has multi tenants with a longer weighted average lease expiry that appeals to core investors.

Savills IM inherited the building when it took over the German funds management company, SEB Asset Management, in 2015.

Manulife has flagged plans to invest in office assets in gateway cities in Asia Pacific, including Melbourne, Sydney, Hong Kong, Singapore, and Tokyo.

Manulife was previously reported to be considering placing a mandate with Eureka Funds Management, now owned by AXA Investment Management, to access more assets in Australia.

It has already bought a central business district building in Raffles Place in Singapore for SGD738m (€453m) in last April.

Speaking to the Singapore media last year, Ted Willcocks, global head of asset management at Manulife Real Estate, said the US526m acquisition of 8 Cross Street in Raffles Place “marks the start of more acquisitions in Asia”.

Willcocks spoke of his pan-Asian strategy then and the ambition to double Manulife’s direct real estate holdings in Asia from some US$2.2bn currently.

He indicated that the intention was to deploy the funds “over the next 24 months”.