The Brisbane-based group purchased the 17-story Health and Forestry House buildings on Charlotte and Mary streets for $65 million in May 2013. It has just sold the properties to Sydney-based AsheMorgan for $66 million.
Cromwell Property Group chief executive Paul Weightman said the investment in the former government-owned and leased buildings was outstanding.
“We bought them with several years of income with a phenomenal return – for four years it yielded 22 percent,” Mr. Weightman said.
Cromwell cleared almost $14 million in rent from the buildings every year since buying. Now the government tenants have vacated and Cromwell has been able to sell at a relatively strong price as well as collect a $4 million payout from the state government to “make good” the premises.
“Now we have sold it with vacant possession for just over what we purchased it for – so we have effectively doubled our money. I would be happy to have that return any day of the week.”
JLL Sales and Investments Queensland’s Seb Turnbull and Luke Billiau negotiated the sale of the properties on behalf of Cromwell.
“The properties were acquired with vacant possession by AsheMorgan, which has plans to completely reposition the assets into a prime-grade office complex called the Midtown Centre,” Mr. Turnbull said.
A development application has been lodged to redevelop the existing podium levels and incorporate additional podium levels on levels three to six, to provide activated ground-level retail tenancies and additional office space with end-of-trip facilities.
The properties have a net lettable area of 26,650 square meters and a land area of about 3500 square meters.
Cromwell had looked at converting the buildings into an alternative use such as apartments or a hotel.