The 2.85-hectare retail complex is home to national retailers including OfficeWorks, Rebel Sport and Good Price Pharmacy.
Located on the corner of Compton and Kingston roads, the centre benefits from a high-profile position in a high growth catchment between Brisbane and the Gold Coast.
This is the sixth acquisition for WPT, with other commercial and retail assets purchased in Hamilton, Spring Hill and Northgate totalling $34.74 million since October 2017.
Clarence Property managing director Peter Fahey marked Underwood as a good fit for WPT, which has more than $250 million in assets between Yamba and the Sunshine Coast.
“Our target asset allocation for WPT is about 30 to 45 per cent retail, with a focus on high yield neighbourhood shopping centres in growth regions,” he said.
Clarence Property’s flagship unlisted Westlawn Property Trust is also offloading a retail centre in Robina with a price tag of $30 million.
Located on a 20,407sq m in Robina, the centre is currently 94 per cent occupied and delivered an 18.6 per cent return to investors in 2017.
Ascendas REIT to buy Australia business park for $33.9m
It has a gross lettable area of 8,216 sq m.
Ascendas Real Estate Investment Trust eyes to acquire Cargo Business Park in Brisbane for A$33.5m ($33.9m), an announcement revealed.
Located near the Brisbane Airport and the Central Business District (CBD), the logistics property has one four-storey and two three-storey buildings situated in a freehold land. It has a gross lettable area of 8,216 sq m with a warehouse/showroom space located on the ground floor and office spaces on the upper floors.
In addition, Cargo Business Park is situated in the established industrial precinct of Eagle Farm. It is also accessible to major roads including the old and new Gateway Motorways which links to the Pacific Motorway to the south and the Bruce Highway to the north.
According to the announcement, the vendor will provide a 12-month rental guarantee for the vacant spaces for their tenants including Commonwealth of Australia (Bureau of Meteorology), Asics, and Nike. Cargo Business Park has a healthy retention rate of approximately 78%.
“Its uniqueness allows us to cater to customers who require a combination of warehousing, showroom and office space in the same building,” Ascendas Funds Management executive director and CEO William Tay commented.
The property’s leases have annual rental escalations of between 3% and 4%, with weighted average lease expiry of 2.6 years as of June.
The deal will seal the firm’s Australian portfolio to 34 properties.
$2.2 billion spree buoys Brisbane office market
The Brisbane office market, which has been slow to bounce back since the end of the mining boom in 2012, has finally swung into recovery mode following a $2.2 billion spree by investors, according to Savills Research.1
The upbeat assessment comes a month after BIS Oxford Economics urged caution against expectations that the worst was over, arguing that the office market remained in oversupply and that despite new lease deals being struck, absorption rates were minimal.
However, the latest Savills Research Q2-18 Office Quarter Time report sees the office building investment figures over FY18 as clear evidence that green shoots are finally emerging in the Brisbane market.
It says the sales have defied expectations of a softening over the past year with the fringe market posting close to $1 billion in sales. This compares with $796 million in sales a year ago.
“Sales in Brisbane’s fringe office markets were driven by interest from both foreign and domestic private investors driving up demand for assets in the $10 million to $50 million range, whilst domestic institutional investors were driving up demand for larger, more prized prime grade assets,” says Peter Chapple, Savills’ state director of capital transaction in Queensland.
“We expect this level of interest to increase considerably over the next six months as investors chase capital value growth relative to the other east coast markets.
“The Brisbane turnaround story is now taking shape, there is a genuine sense of improvement in the occupier markets and increased confidence from buyers looking to position themselves to take advantage of this dynamic.”
The strong sales performance in the fringe market has been bolstered by a robust CBD market, which recorded $1.2 billion in sales in FY18. This is up from $1.1 billion in FY17.
The surge in sales has led to a fall in Brisbane’s A-grade market yields which are down 0.5 percentage points to 6.15 per cent. Although tightening at a greater rate than southern capitals, they remain well above Sydney yields of 4.9 per cent and Melbourne at 5.2 per cent.
The soft point for the data was a lack of capital growth in the fringe market. However, the CBD market posted a rise of 4.4 per cent in capital values over FY18.
Shrabastee Mallik, Savills’ associate director of capital strategy and research, says there will always be a marked difference between the CBD and fringe market in Brisbane.
“However, given the proximity of the fringe market to the CBD and the ongoing renewal of Brisbane’s fringe office markets, the differences in prices and yields are much less pronounced than in other office markets nationally,” she says.
Meanwhile, Chapple says there is anecdotal evidence that investor interest in the office Brisbane market will boost overall investment volumes in the latter half of the calendar year.
He says the Brisbane office market is benefiting from some of Australia’s best labour market indicators as well as population and economic growth numbers.
However, BIS Oxford Economics is not banking on a Brisbane office recovery until the first half of 2020.
In a report titled Brisbane Commercial Property Prospects 2018-28 released last month, it argues that a buoyant market for investors is pushing new projects into the market earlier than needed.
BIS says Brisbane, with 300,000sqm of vacant space in the CBD, still has some of the highest office leasing incentives in Australia.
Suncorp Strikes Massive Leasing Deal as Mirvac Moves to Sell $418m Stake
After months of speculation, Suncorp has announced it will take close to 40,000sq m in Mirvac’s $800 million 80 Ann Street Brisbane CBD tower, marking the largest leasing deal in more than a decade.
In an ASX announcement on Monday, Mirvac said that it has entered into an agreement to sell 50 per cent of the tower to British fund manager M&G Property’s Asian property fund.
The deal, worth $418 million on a 5 per cent cap rate, will see M&G fund 50 per cent of the construction and development costs of the tower.
Now that a major tenant has been secured, Mirvac has exercised a put-and-call option with Singaporean developer Wee Hur for $79 million for the 5,500sq m site. Wee Hur had previously received a permit for a 36-storey student accommodation tower on the site.
The Suncorp lease was fiercely sought-after, with Mirvac beating out Charter Hall and Investa’s 360 Queen Street and ISPT’s Regent Tower for the lease.
Suncorp will take up 66 per cent of the tower – 39,600sq m – for a 10-year term and move into its new Brisbane location by September 2022.
The 80 Ann Street tower will offer 72,540sq m of office space with 1,500sq m floorplates; Mirvac lodged an development application for the Woods Bagot-designed office tower in February.
The move will consolidate Suncorp’s Brisbane workforce into a single office space, following on from similar office consolidation projects the bank has carried out in Sydney, Auckland and Melbourne.
“It will provide the flexibility we require for our future workforce and is an opportunity to bring our teams in Brisbane together into one location,” Suncorp chief executive Michael Cameron said.
Mirvac chief executive Susan Lloyd-Hurwitz said the company had worked closely with Suncorp and architecture firm Woods Bagot on the deal for a number of months.
“We have been able to provide Suncorp with a superior, bespoke workplace solution that meets all of their strategic objectives, and allows for flexibility into the future.”
The $800 million, 32-storey development has been described as a “city within a building”, spanning an entire block between Ann and Turbot streets.
“The design returns the last remaining piece of Brisbane’s oldest surviving fruit and produce market on Turbot Street back into the city fabric, and – with its overwhelmingly public and porous ground floors – will act as a catalyst to the upcoming Brisbane Live precinct and the development of the north-west quarter of the CBD around the Roma Street Station,” Woods Bagot director Mark Damant said.
The 80 Ann Street development will provide 6 Star Green Star, 5 Star NABERS Energy and Gold Shell and Core WELL ratings.
Subject to Mirvac finalising the land acquisition from Wee Hur, Suncorp will move into its new, consolidated digs by September 2022.
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