The 11-storey tower is part of a $250 million Australian portfolio sale put to the market by Perth fund manager Primewest, an entity associated with the late Alan Bond's son, John Bond.

The 13,408-square-metre building, purchased by the Perth investor in 1997 for $13.2 million, is leased to the Grand Prix Corporation, accountants Lowe Lippmann and McCain Foods.

CBRE and Lemon Baxter agents, who marketed the tower, refused to comment on the sales process, which puts a value of about $4000 a square metre on the tower.

It comes as St Kilda Road landlords brace themselves for the biggest slab of vacant space to hit the market since NAB moved out of 509 St Kilda Road in 2013.

Victoria Police is preparing to move out of the 16,000 square metres it occupies at 412 St Kilda Road in July 2016 and into new facilities on the corner of Spencer and Latrobe streets.

Colliers International leasing agent Ben McKendry and Thorburn Property's Kenny Thorburn​ have been appointed to lease the 14-storey building, part-owned by Ian Robinson's IGR, which has a seven-level car park. A full refurbishment has been proposed.

"While the building had been touted for residential conversion, that's not a fait accompli. There's not a lot of good quality buildings on the market now, there are not enough options for tenants," Mr McKendry said.

Up the road at 324 St Kilda Road, the building owned by the Lester-Group has five vacant floors following the departure of Wesfarmers' subsidiary Target to its Geelong headquarters. Wesfarmers is the building's anchor tenant.

Mr McKendry said the eight-level building will be on the market next month through Colliers International.

"I think that will stay as office and rent out quickly. It's in that prime space near the Shrine," he said.

Despite the growing vacant space, the St Kilda Road vacancy rate is still declining. It fell to 9.77 per cent in January, down from 11 per cent a year ago and is expected to fall further, to below 9 per cent next year.

The move to convert or replace ageing office buildings with apartment buildings is soaking up space on the once-premier leasing strip. In the past 15 years, Docklands, with its vast brownfield spaces. has been the location for new office-style buildings with the fashionably large floor plates.

It's almost full cycle for St Kilda Road, which harboured bushrangers in the 1840s before trees were cleared for mansions. In the 1960s, those mansions were bulldozed for modernist office towers.

Last month, Rozella sold 478 St Kilda Road and its heritage-listed Hotel Charsfield to the Chinese-owned Ever Bright Group, which is planning to build a residential tower. And the Schwartz-backed Qualitas Group has paid $80 million for the Fawkner Centre, which will become a $300 million luxury apartment building.

IGR  tried to sell the building occupied by Victoria Police last year for about $60 million but a deal failed to proceed. However, the market has heated up another 10 per cent since then, with prices heading towards $4000 a square metre.

Sydney-based Islamic fund manager Crescent Wealth paid $30.75 million for 10-16 Dorcas Street, just off St Kilda Road, at $4000 a square metre. Last year, No.600 sold for $81.5 million and earlier this year No.432 fetched $41.6 million.

The next building to sell is likely to be 606 St Kilda Road, formerly known as Hoechst House, which has been put to market by Hong Kong expat Malcolm Dumenil. Several buyers are understood to be circling the asset, which is being sold by Knight Frank.