This article is from the Australian Property Journal archive
THE Centuria Direct Property Fund has sold an office building at 607 St Kilda Rd for $28.54 million, 10% above the current book value.
CDPF bought the property in 2002 for $21 million.
The sale price represents a yield of 8.23%.
Centuria Property Funds CEO Jason Huljich said the sale is another example of the group’s ability to reposition properties.
“Centuria has a successful track record of re-positioning property assets and 607 St Kilda Rd is no exception, with investors benefiting from the solid capital gain achieved plus strong income distributions throughout the term of the fund.
“Since 2002, Centuria has added significant value to the asset by undertaking extensive refurbishment and service upgrades throughout the building; including new air-conditioning plant, refurbishment of the office floors, common areas and amenities along with an intensive leasing campaign leading to increased value and growth in capital for investors,” he added.
Huljich said the sale campaign received multiple offers.
“This is one of the few buildings along the boulevard to have had a major upgrade, directly enhancing the quality and attractiveness of the building leading to a positive leasing response to the building, resulting in a 100% occupancy and a weighted average lease expiry in excess of six years,” he continued.
The 12 storey building comprises a net lettable area of 7,207 sqm plus 128 secure car spaces and is currently returning $2,346,184 pa.
Centuria Capital has been active in St Kilda recently. Last month it bought 441 St Kilda Rd for $58 million on behalf of the Over Fifty Guardian Friendly Society.
Centuria intends to refurbish the property.
“Centuria continues to seek value-add opportunities for its property funds management business in all major metropolitan areas like the St Kilda Road precinct, where it can employ its property skills to enhance value whilst minimising risk,” Huljich said.
Property Review
