The huge price paid for one of Melbourne's landmark green buildings attests to the premiums that sustainability can provide to property owners.

The sale of the EPA Building, one of Melbourne’s most sustainable office buildings, is set to provide its owners with a immense profit less than a year following its purchase.

Impact Investment Group has agreed to sell the building, situated at 200 Victoria Street in the Melbourne suburb of Carlton, for $42.3 million to Australian Unity Diversified Property Fund in an off-market transaction that will reap a profit of close to $10 million compared to its purchase price at the end of last year.

IIG acquired the A-grade office property in December 2013 for $33,550,000, at which time the building was only partially leased, with a vacancy rate of around 30 per cent. The new sales price represents a premium of $5 million on the valuation of the property when fully leased.

The building is now fully occupied following the execution of a 10-year lease with the University of Melbourne’s Trinity College at the start of the year for two floors and ground space.

The weighted average lease expiry is currently 8.6 years, with 96 per cent of income for the property derived from key tenants Trinity College and the Environmental Protection Authority.

The EPA Building is considered to be one of the most sustainable office properties in Melbourne, enjoying some of the top green building accreditations in the industry, including a 6 Star Green Star Office Design and as Built rating, as well as a 5 Star NABERS rating.

Its impressive green building credentials are the result of a major overhaul launched in 2009 to transform it into one of the city’s most sustainable office buildings. Sustainable features and improvements include a trigeneration plant, rainwater harvesting, high-performance glazing and energy efficient lighting.

It property is also situated in a highly desirable location, on the periphery of the Melbourne’s  CBD near the Queen Victoria Markets and the Carlton campus of the University of Melbourne.

While IIG originally planned to retain the building for another four years in order to enjoy its strong tax deferred cash yield, the offer made by DPF was considered too good to refuse given the significant premium it provides compared to both independent valuations and the purchase price.

The deal is expected to be settled in late October 2014.