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Brisbane Service stations show investment potential

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High-rise developer Ken Woodley is looking for more service stations to top up his personal Brisbane Investorinvestment portfolio.

With a long-term lease in place, the veteran Brisbane property player recently snapped up a newly-built service station at 2009 Sandgate Rd, Virginia.

The transaction reflects the continuing strong level of investment activity in the retail service station sector.

It is Mr Woodley’s third acquisition of a service station asset after shifting the focus of his investment portfolio from convenience retail centres.

His other purchases include a Woolworths Petrol at Kenmore and a Caltex in North Lakes.

“With shopping centres you’re dealing with multiple businesses and co-ordinating a number of tenants,” Mr Woodley said.

“But with the service stations I’m only dealing with one company for each of them. It’s absolutely trouble free.”
The Virginia service station was purchased on a yield of 5.75 per cent and Mr Woodley said he was achieving returns of up to 7 per cent from his other two assets.

Developed by Evans Long on a high profile 2843sq m site, it is leased to 7-Eleven on a 15-year lease plus four five-year options. The tenant is responsible for all outgoings, excluding land tax.

Savills’ Michael Harcourt, who negotiated the asset’s sale, said the agency’s Brisbane office had been involved with 10 service station investment and development site transactions over the past 12 months totalling almost $25 million.

“Investor demand for blue chip, long term-leased service station assets remains very strong,” he said.

“The lack of available stock coupled with record low interest rates has resulted in substantial yield compression across the country.

“But with the aggressive expansion of major fuel retailers — namely Coles Express, Woolworths, Caltex, 7-Eleven, Viva (Shell), BP and Puma — developers are actively seeking suitable sites to satisfy tenant demand and generate potentially substantial capital returns.”

According to construction activity analysts Cordells, there are 100 potential new or redeveloped service stations in Queensland that have been recently delivered or are in planning and development stage.

Mr Harcourt said the acquisition of the three service station assets by Mr Woodley followed his divestment of two retail convenience centres — Holland Place at Holland Park West in Brisbane’s inner southeast for $3.4 million, and the Sherwood Court in the city’s southwest for $3.9 million.

The sale of the site for the Virginia service station in October 2014 for $1.75 million to Evans Long also was negotiated by Mr Harcourt. It was sold with a lease agreement in place with 7-Eleven.

Mr Harcourt said the completed service station appealed due to its high-exposure main road location underpinned by a secure long-term lease.

“It is in a very prominent left-hand inbound location adjoining Virginia Golf Course on Sandgate Rd, one of the main arterial roads in Brisbane’s northern suburbs with an average of over 54,000 passing vehicles each day,” he said.

“The combination of the high-profile positioning, strategic inner Brisbane location, new construction and long-term lease presented a prime service station investment proposition.”

 

Article originally published by Phil Bartsch, The Courier Mail, 27/5/2016

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Commercial

Hong Kong’s Ovolo snaps up Brisbane’s Emporium Hotel for $40m

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Hong Kong's Ovolo snaps up Brisbane's Emporium Hotel for $40m Read more: http://www.afr.com/real-estate/commercial/hotels-and-leisure/hong-kongs-ovolo-snaps-up-brisbanes-emporium-hotel-for-40m-20180110-h0ga8x#ixzz53rOLTjgq Follow us: @FinancialReview on Twitter | financialreview on Facebook

Hong Kong-based boutique hotel chain Ovolo has snapped up the Emporium Hotel in Brisbane’s Fortitude Valley for about $40 million in the first major hospitality deal of the year.

It is the second Brisbane hotel acquired by Ovolo Hotels in the space of seven months after it acquired the 50-room New Inchcolm Hotel & Suites in Brisbane for $16.5 million in June.

The 102-room Emporium Hotel at 1000 Ann Street was sold by its founder and managing director, Tony John, of the Anthony John Group. It opened in 2007, when it was positioned as Brisbane’s first luxury boutique hotel.

Hotel amenities include a rooftop pool, gm and sauna, cocktail bar and patisserie as well as conferencing and events centre.

Mr John said he had decided the time was right to sell the Fortitude Valley property as it would “allow the team time to focus on the 2018 opening of our luxury boutique Southpoint Emporium Hotel”.

Ovolo’s latest aquisition means the hotel chain, founded by Girish Jhunjhnuwala in 2002, now has five hotels in Australia, with two Sydney hotels in Woolloomooloo and Darling Harbour and one on Little Bourke Street in the centre of Melbourne.

“The Emporium Hotel in Brisbane was an obvious choice for the brand given its incredible success to date, its boutique nature and appealing location in the Fortitude Valley retail and dining precinct,” Mr Jhunjhnuwala said.

“We are excited to take this fantastic property to the next level with Ovolo’s signature luxury design interiors and all-inclusive hospitality concept,” he added.

The sale of the Emporium was brokered off-market by CBRE Hotels national director Wayne Bunz, who said it was a very positive sign for the local market heading into a new year.

“The sale highlights investors’ growing interest in the Brisbane hotel market. CBRE continue to field investor demand for investment opportunities, with the Emporium Hotel sale negotiated in a record time of just four weeks,” Mr Bunz said.

The Hong Kong operator’s flagship Ovolo Woolloomooloo and Ovolo 1888 Darling Harbour were recently ranked as the second and sixth-best hotels in Australia, according to TripAdvisor’s Travellers Choice Awards 2017.

Ovolo Hotels recently joined the co-working office movement after Ovolo Woolloomooloo signed a co-working deal with start-up TwoSpace, who will set up co-working spaces in the hotel’s lounge. It operates four hotels in Hong Kong.

Originally Published: www.afr.com

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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

Sentinel Disposes Of Banyo Facility For $37 Million

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brisbane commercial

Sentinel Property Group has sold a warehouse leased to a subsidiary of BlueScope Steel in the Australia TradeCoast precinct on Brisbane’s northside.

Located on a 47,880sq m site at 920-928 Nudgee Road, Banyo, the steel processing and distribution facility was leased long-term to BlueScope until 2026.

The sale was negotiated by CBRE’s Ed Bull and represented a yield of around 6.70 percent. Sentinel acquired the Banyo site in April 2011 for $23 million.

Sentinel managing director Warren Ebert noted that the group had both bought and sold industrial property in the prime TradeCoast precinct, recently purchasing a waterfront bulk storage facility at nearby Pinkenba for $48.5 million in a leaseback arrangement with global diversified industrial chemical company Incitec Pivot.

“Our decision to sell this high performing asset is consistent with Sentinel’s strategy of buying at an opportune time and then selling based on our view of the market,” Ebert said.

The average prime yields in Brisbane’s industrial market now sit between 6.75 percent and 7.25 percent, reflecting limited on-market opportunities for quality stock.

The property comprises approximately 17,000sq m of warehouse and office space. The property is 10 kilometres from the Brisbane CBD, adjacent to the Brisbane Airport, and has direct access to the Gateway Arterial Motorway.

The facility offers an opportunity for further expansion with only 36 percent site coverage.

Brisbane-based Sentinel Property Group has a total national portfolio of more than 40 retail, industrial, office, land, tourism infrastructure and agribusiness assets across Australia, worth over $1 billion.

Originally Published: www.theurbandeveloper.com

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