High-rise developer Ken Woodley is looking for more service stations to top up his personal investment 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
QIC Lists Up to $2 Billion of Assets
Fund giant QIC has listed two CBD assets, one in Brisbane and another in Melbourne.
QIC has listed its landmark 80 Collins Street development, as well as its surrounding precinct of properties creating one of Melbourne’s largest-ever office, hotel and retail property offerings.
The second of the listings, located at 61 Mary Street in Brisbane’s CBD, is an office tower held in QIC’s Government Office Fund.
The listing comes as major government infrastructure projectsincluding the $3 billion construction of Queen’s Wharf, Cross River Rail and the Brisbane Metro start to change the landscape and accessibility of Brisbane’s CBD.
The prime CBD assets together are expected to yield north of $2 billion.
The 17-level tower at 61 Mary Street has 28,749 sq m of net lettable area and an average lease expiry of more than 10 years.
Over the past several years the tower has undergone a $44 million refurbishment and has been awarded a 5 Star NABERS energy rating.
It boasts one of the most expansive floor plates in the Brisbane’s CBD, up to 2,030 square metres.
QIC has appointed Knight Frank’s Justin Bond, Ben McGrath and Neil Brookes along with CBRE’s Tom Phipps, Bruce Baker and Flint Davidson, to broker the property.
“Fully occupied by the Queensland state government under a lease until 2029, 61 Mary Street is a unique investment ideally located within proximity to the Queens Wharf precinct and the proposed Cross River Rail project,” Knight Frank’s Justin Bond said.
“While strong domestic interest continues for Brisbane, throughout 2018 we have also witnessed increasing investor demand from Asia, Europe and the US, with limited availability in the market for CBD assets offering long-term secure income.”
CBRE’s senior director of capital markets Tom Phipps said the sale campaign has come at the right time with a strengthening confidence in Queensland’s property market.
The second of the two offerings is the precinct controlled by QIC located at the “Paris end” of Melbourne’s Collins Street including QIC’s existing 52-storey office tower at 80 Collins Street.
Around that existing tower, and part of the current listing, is QIC’s $800 million mixed use development.
The mixed-use tower was designed by Woods Bagot, and Seventh Wave, along with Amsterdam-based UN Studio and Paris-based Jouin Manku.
QIC lodged plans to develop the mixed-use complex in 2008, capitalising on ownership of multiple properties on Collins Street.
The project comprises a 39-storey office tower, along with a 300-room hotel – to be operated by NEXT, as well as retail offerings throughout the podium levels of around 5,800 square metres.
“80 Collins will be a destination that honours Melbourne’s thriving culture and commerce and is situated at the centre of a globally recognised precinct with a distinct local identity,” QIC managing director Steve Leigh said.
The tower, which overlooks the Royal Botanic Gardens, has been designed to achieve a 5-star NABERS energy rating and a 6-star Green Star office design rating.
Multiplex is currently building the new tower, which will have a blue-chip tenants including investment bank Macquarie who have taken a reported 6000sq m of the leasable 43,000 sq m tower.
The total precinct is expected to sell for about $1.8 billion.
Charter Hall Buys Brisbane No 1 Skyscraper Site for $94m
Active property fund manager Charter Hall has acquired the high-profile development site for No. 1 Brisbane, a proposed 81-storey skyscraper on Brisbane’s Queen Street Mall that won approval in 2017.
The Blackstone-owned 151 Property Core Plus Management fund listed the site in February. The parcel comprises three office buildings with a total lettable area of 10,183sq m and three separate frontages to the Queen Street Mall, George Street and Burnett Lane.
The purchase price of $93.96 million represents a core cap rate of 7.45 per cent and a fully-let passing yield of 7.9 per cent.
Charter Hall has been dominant in Brisbane’s office market this year – on Monday, two of its funds picked up Ariande’s 40 Tank Street building for $93 million and, along with Investa, Charter Hall won approval for a $650 million office tower on Queen Street last month.
The fund manager has also secured QSuper for nearly 18,000sq m at its Brisbane Square Tower and acquired the landmark Suncorp Plaza tower in Albert Street.
Charter Hall managing director David Harrison said that the acquisition will be used as a seed asset for a new investment strategy.
“This is a rare opportunity to acquire three prime retail/office buildings, at close to office values per square metre, that have created a fantastic amalgamated future redevelopment opportunity which can be held over the medium term in a CBD undergoing significant infrastructure improvements.”
Charter Hall won approval for a 50,000sq m office project in Brisbane’s “golden triangle” – the Eagle Street and Riverside Place Area – in late June. Pictured: A rendering of the 370 Queen Street proposal.
Harrison suggested that the group may not move ahead with the approved plans for what would be Brisbane’s tallest tower, saying that the group will consider redevelopment longer term “while we actively manage and lease up vacancies”.
“Eventually our vision would see a new development like the successful 333 George Street project in Sydney CBD opposite Martin Place completed.”
Charter Hall’s 15-storey 333 George Street development, designed by Grimshaw with Crone architects, would deliver a much more modest outcome for the site than the approved 81-storey skyscraper.
The $250 million George Street project in Sydney secured WeWork as its anchor tenant – the co-working giant took a third of the entire lease – and was recently awarded commendations in the commercial architecture category and the City of Sydney Lord Mayor’s prize category at the 2018 NSW Architecture Awards.
Charter Hall Buys $93m Brisbane Tower from Kevin Seymour, Ariande
ASX-listed Ariadne Australia has capitalised on Brisbane’s booming office market with the sale of 40 Tank Street to a pair of Charter Hall-run funds for $93 million.
The sale is $37 million more than Ariadne and its deputy chairman Kevin Seymour paid US private equity giant Blackstone for the building little over a year ago.
The purchase was made by the listed Charter Hall Long WALE REIT and the unlisted Charter Hall Direct PFA Fund in a deal struck on an initial yield of 5.84 per cent.
The 10-storey office building comprises a net lettable area of 6218sq m and 327 car parking bays across five levels.
The building, which was 80 per cent occupied when purchased by Ariadne last year, has benefited from the company’s repositioning of the occupancy and renegotiated a new partnership with Care Park.
The state government’s police services also took out the remaining space in the tower’s office at a weighted average lease expiry of 6.3 years.
Ariadne expects that net profit before tax would be $17.6m-$19.6m, down on the previous year’s $76.9m profit that was bolstered by a $67.1m gain on selling Secure Parking.
Ariadne will collect $14.8 million in net proceeds from its share, to be included in its 2018 fiscal year result.
JLL’s Geoff McIntyre, Seb Turnbull and Luke Billiau brokered the deal which is scheduled to settle at the end of August.
Brisbane’s office market is currently enjoying the positive effects of an economic turnaround coupled with a flurry of investment activity.
Almost $2 billion worth transactions taking place in the city’s office markets last financial year.
Last week, Mirvac agreed to sell 50 per cent of its 80 Ann Street Brisbane CBD tower to British fund manager M&G Property’s Asian property fund for $418 million on a 5 per cent cap rate.
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