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Investor Pays $64 Million For Premium Asset In Brisbane’s Fortitude Valley Precinct

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Investor Pays $64 Million For Premium Asset In Brisbane’s Fortitude Valley Precinct

Located at the gateway to the Fortitude Valley precinct, approximately 750 meters from the Brisbane CBD, the asset was sold by JLL on behalf of AM Valley Heart Pty Ltd, representing a net passing yield of 6.58 per cent.

Duncan Street’s asset comprises a commercial car parking facility for 464 vehicles, 2,816 square metres of office and 1,310 square metres of retail and substantial redevelopment potential of up to 30 levels.

The International Expressions of Interest campaign conducted in conjunction with CBRE generated significant interest with in excess of 200 enquiries from a diverse capital base, many of who were enticed by the asset’s strong tenant covenants, significant underlying land value as a 4,183 square metre site and multiple redevelopment options.

31 Duncan Street is 96 per cent by income leased with an 8.9 year WALE.

Around 62 per cent of the asset’s income is underpinned by a fifteen year lease to Secure Parking, which expires in 2031.

“The asset had the unique benefit of strong cash flow fundamentals and significant underlying land value,” JLL Director of Queensland Sales & Investments Luke Billiau said.

31 Duncan Street is situated in Brisbane’s Urban Renewal Precinct, which has consistently outperformed wider occupier markets, registering a 127.4 per cent increase in occupied stock. According to JLL, this outperformance has continued over the past twenty-four months with office vacancy decreasing five per cent from its January 2015 peak to 9.9 per cent.

Originally Published: www.theurbandeveloper.com

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Commercial

Sydney to Hobart veteran Peter Harburg selling remaining $150m properties

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Sydney to Hobart veteran Peter Harburg selling remaining $150m properties Read more: http://www.afr.com/real-estate/sydney-to-hobart-veteran-peter-harburg-selling-remaining-150m-properties-20180214-h0w2ly#ixzz5780U6oFr Follow us: @FinancialReview on Twitter | financialreview on Facebook

Sydney to Hobart sailing veteran Peter Harburg has made a call to sell two of his last major office towers in Brisbane worth well over $150 million, including Westpac’s local headquarters.

Mr Harburg, who has completed 12 Sydney to Hobart races in the famous Blackjack yacht, said the market was strong and that influenced his decision to sell out.

“I’m 76 now and I think it’s time to start doing more important things like sailing boats and driving cars,” Mr Harburg told The Australian Financial Review.

“The market is very strong at the moment – it’s a supply and demand thing and at the moment the demand is very strong and this has certainly helped influence the decision to sell.”

Peter Harburg on his boat Blackjack. "I'm 76 now and I think it's time to start doing more important things like sailing ...

Peter Harburg on his boat Blackjack. “I’m 76 now and I think it’s time to start doing more important things like sailing boats.” Glenn Hunt

Mr Harburg acquired a number of Brisbane office buildings over the years, including 50 Ann Street which he has since sold for $131.8 million to Asian group Capital Trust and 348 Edward Street Brisbane which he sold to US property group Hines for about $50 million.

Now his private investment company Harburg Investments has appointed CBRE’s Bruce Baker, Tom Phipps and Flint Davidson to steer the sale of his remaining CBD assets – 260 Queen Street and 95 North Quay – with the assets to be offered either as a portfolio or individually.

Mr Baker said the campaign was expected to attract significant interest given that both properties were extremely well located and offered different income streams and capital-related outcomes.

“Last year was a very active year for the Brisbane office investment market, with new investors and foreign capital attracted by the comparatively attractive yield spread to Sydney and Melbourne,” Mr Baker said.

“A well-researched consensus is that Brisbane offers net effective rental growth going forward over the next five years, with Brisbane having become the second fastest growing white-collar employment market in the country.”

The boutique A-grade building at 95 North Quay, in Brisbane's legal precinct, is predominantly occupied by barristers ...
The boutique A-grade building at 95 North Quay, in Brisbane’s legal precinct, is predominantly occupied by barristers and legal professionals and provides a current net lettable area of 8710sq m. Supplied

Key drawcard

The agents describe the tower at 260 Queen Street – occupied by anchor tenant Westpac since it was constructed – as an “iconic core office asset and arguably Brisbane’s best located asset”.

The building has a net lettable area of 13,300 square metres and offers large 1000sq m podium floor plates with 20 high-rise floors above.

A prime retail amenity is located on the ground floor, the majority of which is occupied by Westpac as a retail banking chambers.

“The building’s super prime Queen Street location near Central Train Station and the Queen Street Mall shopping precinct will be a key drawcard for prospective purchasers and tenants alike,” CBRE’s Mr Phipps said.

“There is existing development approval for a glass box-style podium refurbishment as well as the potential to extend the existing floor plates and/or reconfigure the retail space.”

The boutique A-grade building at 95 North Quay, in Brisbane’s legal precinct, is predominantly occupied by barristers and legal professionals and provides a current net lettable area of 8710sq m.

“While the building is currently 58 per cent occupied, there is a clear opportunity to ‘re-set’ the asset to capitalise on Brisbane’s improving occupier market,” Mr Phipps said.

 

Originally Published: www.afr.com

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Commercial

Demand for Neighbourhood Shopping Centres Continues with $23m Sale

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Demand for Neighbourhood Shopping Centres Continues with $23m Sale
A suburban Brisbane shopping centre has sold to a Chinese investor for $23.3 million on a net yield of 6.95 per cent.

Marketplace Deagon Shopping Centre at 55-75 Braun Street Deagon is a fully-leased modern neighbourhood centre anchored by an IGA supermarket. The centre sits on a 14,070sq m site with a lettable area of 6,004 square metres. The lettable rate is $3,881 per square metre.

The deal was brokered by Savills’ Jon Tyson, Michael Harcourt and Peter Tyson. The agents expected the centre to attract strong investor interest given the ongoing demand for the attractive neighbourhood centre asset class.

Deagon is located 16km north of Brisbane’s CBD and sits behind the bayside suburbs of Sandgate and Shorncliffe overlooking Moreton Bay. The suburb has been popular with first home buyers and young families in recent years due to its comparative affordability.

Neighbourhood and sub-regional centre vacancy rates have been relatively stable since 2009, with only minor fluctuations. Recent research from JLL notes that centre owners are taking a proactive approach to retailer engagement strategies to ensure occupancy rates are maintained in face of changes in the retail industry.

Quality neighbourhood shopping centres have been in demand in city areas and also regionally. Last week, AM Australia Retail Property Fund acquired the Springfield Fair neighbourhood shopping centre from Charter Hall Retail REIT for $23.5 million on a yield of 7.05 per cent.

Originally Published: theurbandeveloper.com

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Commercial

Clarence Property Acquires Hamilton Building for $12m

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Clarence Property Acquires Hamilton Building for $12m

Property funds manager Clarence Property’s unlisted Westlawn Property Trust has acquired a commercial and retail building in the heart of Brisbane’s Hamilton for $12 million.

The fully tenanted asset at 9 Hercules Street Hamilton is a 2,175 square metre commercial precinct currently home to Vystal Property Group, Exercise Sports Science Australia, Corporate Development Mentors and Medi Pro Capital Finance.

“The Brisbane city and fringe market remains highly competitive in the sub $15 million range, so finding an asset that wasn’t over rented with a WALE above 3.5 years was very attractive,” Clarence Property managing director Peter Fahey said.

“The site also has an approved unit development which offers flexibility in the future should we decide to develop when the time is right.

The property is located near the $1 billion Portside Wharf, one of Brisbane’s most active retail precincts adjoining the Brisbane cruise terminal.

Clarence has kept their trust busy over the past year with a string of acquisitions and a recent capital raising in a bid to bring more investors into their fold.

The recently launched capital raising for WPT forecasted a seven per cent monthly cash distribution to investors and an 8.6 per cent gross distribution including franking credits.

The successful acquisitions over the past 12 months included the purchase of 201 Leichhardt Street Spring Hill for $14.272 million and 48 Bell-Aire Avenue Northgate for $8.475 million in October 2017.

Commercial precinct 183 Varsity Parade, Varsity Lakes, was secured for $11.8 million in March 2017, bringing the total value of WPT acquisitions over the past year to $46.5 million.

“We continue to invest predominantly in the northern New South Wales and South East Queensland regions, where we see strong potential, and we have spread our interests across retail, commercial, logistics and development assets to leverage opportunities for growth across the board,” Fahey said.

Originally Published: theurbandeveloper.com

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