Local investment manager Bayley Stuart Capital has boosted its city-fringe portfolio after scooping up an East Melbourne office for nearly $52 million.

The five-level office at 89 Wellington Parade South was offloaded by Adelaide-based fund manager Harmony Property Investments for $51,785,000 on a passing yield of 4.5 per cent.

Bayley Stuart, run by Alasdair and Andrew MacGillivray, has a strategy of snapping up new offices on the city’s fringes. In the last three years it has accumulated several buildings in Cremorne and Abbotsford, at least two of them off the plan.

The East Melbourne property was first pitched to investors in May just as the Reserve Bank lifted the official cash rate for the first time since November 2010. It was also the first rise in the midst of a federal election campaign since 2007, but since then, rates have risen five times to land at 2.85 per cent.

Despite the subsequent rises, Daniel Wolman from commercial agency Colliers said the Wellington Parade property attracted strong interest from both domestic and international buyers.

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Wolman, who negotiated the deal with Matt Stagg, Oliver Hay and Leon Ma, said the building’s proximity to the east end of Melbourne’s CBD makes it an attractive prospect to tenants.

The office, with a lettable area of 5526 square metres, is anchored by Arthur J Gallagher & Co. It backs on to a gleaming residential tower that was part of the original complex developed by the failed Becton Property Group and purchased by Harmony in 2009. The building is about 80 per cent occupied.

It sits on the south side of the Fitzroy Gardens, next to the Jolimont rail yards.