This article is from the Australian Property Journal archive
CROMWELL Ipswich City Heart Trust investors are laughing all the way to the bank following the sale of the Icon Tower asset in Ipswich for $144.9 million, in the largest sale of a Queensland office building outside of Brisbane, to property funds manager Castlerock.
As a result of the sale, unitholders will receive an initial special distribution of around $1.75 per unit and potentially a further distribution upon wind-up.
The trust has provided its investors with a 14.6% annual return since it was established in December of 2011.
Cromwell Funds Management Limited (CFM moved to sell the site as 117 Brisbane Street due to the $16.4 million premium offered to the previous book value of the property of $28.5 million, additionally the trust has under two years until it reaches maturity.
“It was a difficult decision to sell the property however, with less than two years to go to maturity, we felt that money-in-the-hand was the right outcome for unitholders,” said Hamish Wehl, head of retail funds management.
The nine-storey 17,870sqm A Grade building, with 207 basement level car parks and 120 bicycle parking stations, holds a 5-Star NABERS rating and was the first building in Ipswich to receive a 5-Star Green Star rating.
“Interest rates have dropped substantially since the Trust was launched in 2011 making it difficult to replace, however, Cromwell’s Direct Property Fund currently pays a distribution yield of 5.6% which we believe is a very attractive rate for investors looking for regular, reliable income,” added Wehl.
Simon Beirne and Sam Biggins from Colliers introduced the purchaser to the trust.
“Queensland has proven its resilience over the past 18 months and is seeing an increase in allocation of capital from investors across all asset classes to both the southeast corner and key regional markets. With the announcement of the 2032 Olympics, the macroeconomic themes for the State are positive,” said Beirne, state chief of executive at Colliers.
According to Biggins, Colliers’ Queensland director of investment services, this was the largest sale of a Queensland office building outside of Brisbane ever, with Castlerock being drawn to the fast growing Ipswich region due to its long term growth prospects.
“Castlerock’s acquisition is further evidence of syndicator-capital moving up the price curve into larger office assets in key metropolitan markets in Queensland,” concluded Biggins.
Cromwell Property Group, having appointed Gary Weiss as its new chair in March, delivered a statutory profit of $308.2 million in FY21.
The sale of 117 Brisbane Street is anticipated to settle on 21 October 2021.
