This article is from the Australian Property Journal archive
A local investor has fought off deep pocketed investment groups, in another hotly contested bid, to snare an office building in the Adelaide CBD.
Knight Frank has sold the office building at 26 Flinders Street for $26.7 million on a yield of circa 8% – above its asking price of $25 million.
The vendor is an overseas group, Development Management Australia Pty Ltd, who sold the prime 16-level office building to an unnamed local investor.
The glass building has a total lettable of 10,418 sqm and sits on a large site of 1,654 sqm. In addition, the property has 68 secure basement car parks.
The property is 98.5% leased with an estimated net income approximately $2.3 million per annum.
Selling agent Knight Frank’s Don Crouch said the property was highly sought after, down to the last stage of bidding.
Crouch said there were six parties vying for the property and they were all within $300,000 of each other.
“It did surprise us in the end with the number of interested parties and how close the offers were within each other,” he added.
Crouch is also marketing another property at 34 Greenhill Road, Wayville. He expects the Greenhill property to fetch around $10 million.
The two level office building is currently tenanted by Gribbles, a subsidiary of Healthscope with seven years remaining on the lease.
Crouch said there more stock on the market right now than it has been for a while.
“I think owners are taking advantage of the tax free super period which expires in June 30 this year, and liquidating their assets,” he added.
Meanwhile, the Caversham Property Group’s City Central Tower 2 is under contract and due to be settled soon.
The City Central Tower 2 property at 121 King William Street, Adelaide, South Australia, Australia is the second stage of the $700 million City Central mixed use development.
The first stage was sold to the Commonwealth Property Office Fund for $143 million on a yield of 7.5%.
The Adelaide market has been ringing hot, particularly in the second half of the last year.
In the six months to December 2006, SachsenFonds GmbH bought ACCU House at 52-60 Light Square for $32 million from Tritan Corporation; the Germany syndicator also purchased the Flinders Link development in Flinders Street for $150 million from the Hindmarsh Group, Kambitsis Group and PT Building Services.
And the South Australian Police headquarters was also sold during the period to Melbourne based company Shakespeare Management Pty Ltd – owned by Quek family, for $30 million.
Australian Property Journal
