This article is from the Australian Property Journal archive
FUND manager Clarence Property has spent almost $23 million in a matter of weeks on Brisbane commercial assets, having just acquired a Spring Hill office building for $14.272 million.
The 201 Leichhardt Street acquisition follows the $8.475 million purchase of an industrial complex at Northgate, with both properties to be placed in its unlisted $400 million Westlawn Property Trust portfolio.
The Spring Hill office building is anchored by entertainment and events network Ticketek, and also counts ERM, Integral and Ipsos amongst is tenants.
Colliers International’s Jason Lynch negotiated the Spring Hill deal in conjunction with Knight Frank’s Ben McGrath on behalf of Cornerstone Properties.
It marks Clarence’s return to the Brisbane commercial property market, after divesting its 307 Queen Street tower in late 2013 for $120.8 million.
“We see value in the Brisbane market and we anticipate it will continue to strengthen over the coming years,” Clarence’s managing director Peter Fahey said.
“The Leichhardt Street property is appealing as it has recently undergone a substantial refurbishment with no capital outlay required, is located close to the CBD and was bought on a yield above eight per cent which supports Westlawn Property Trust’s current distribution,” he said. “As a rule we look for assets that are anchored by quality tenants and provide scope for growth or improvement.”
McGrath said Clarence secured the Spring Hill asset at a perfect time, following the recent approval of the Spring Hill Neighbourhood Plan.
“There was a significant amount of interest in this asset, partly due to the location and future development upside associated with the revised Neighbourhood Plan, but also due to the limited opportunities that exist in the sub $20 million Brisbane CBD and near-city office market,” he said.
He said Cornerstone Properties’ high quality refurbishment was also a reason for the large amount of interest in this asset.
Lynch said that given the improving leasing market in Brisbane, it is anticipated net effective rents will follow suit, so the 2.6-year WALE in combination with limited CAPEX risk was what made this asset an attractive investment for Clarence Property.
The Northgate site at 48 Bell-Are Avenue has a four-year lease with a five-year option to veterinary distributor Provet, a subsidiary of Fortune 300 company Henry Schein. The property was purpose-built for Provet in 2007.
Fahey said the group intended to strategically expand its holdings in the industrial sector, having acquired its first asset in the class in September last year – 45 Alexandra Place in Murrarie, in the Australia TradeCoast region for $10.3 million.
Australian Property Journal
