This article is from the Australian Property Journal archive
CENTURIA Metropolitan REIT has more than doubled its money on a Sydney suburban office building in Epping in just three and a half years of ownership.
It sold the fully leased 3 Carlingford Road asset for $36 million to a private buyer, reflecting 118% increase on its purchase price of $16.5 million in December 2014.
The latest transaction reflects a passing yield of 5.4%, and a 27.2% premium on its last independent valuation in November 2017.
“With more than a dozen bidders competing for the asset, we are clearly continuing to see a strong demand for metropolitan property – and in particular for high quality properties with development potential,” CMA trust manager, Nicholas Blake said.
“We usually look for and manage properties with an eye to leaving their purpose and use open-ended. Such flexibility is the best strategy to future-proof assets for investors, as well as addressing the need for high quality suburban stock.
“On this occasion, we have been able to realise a premium on the asset, and achieve a tight passing yield of 5.4% which compares positively against typical yields we see in key NSW metro markets of around 6% to 7%,” he added.
Guillaume Volz and Henry Burke of Colliers International, together with Tim Grosmann and Graeme Russell from Savills negotiated the deal.
Grosmann said the “excellent result” was a direct result of prime property fundamentals, including a corner block, close proximity to a train station and strong rental reversion in a market that is starved of commercial suburban stock.
Volz said the sale demonstrates that strong buyer interest still exists from both local and offshore buyers for well-located suburban properties, with passing income and good development potential.
Settlement is expected in September.
Blake said the proceeds would be used to unlock select, accretive acquisition targets and further capital management initiatives.
Australian Property Journal
