This article is from the Australian Property Journal archive
THE Charter Hall Long WALE REIT is selling the inner Brisbane office building campus once headquarters to Virgin Australia for $70.9 million – some $20 million less than what it paid the airline for the asset four years ago.
The collection of three separate A-grade buildings at 56 Edmondstone Road in Bowen Hills has a net lettable area of 12,427 sqm. Each building contains three levels of office space with a basement for parking for a total of 149 car bays.
It is on a 9,300 sqm parcel that includes an on-site café, surrounded by several retail and lifestyle precincts and is 350 metres from the Bowen Hills train station.
Charter Hall bought the asset four years ago for $90.8 million and recently secured a lease over Building C with Fujifilm. It has now sold it to Real Asset Management (RAM).
RAM head of real estate, Will Gray said the asset would become the fourth in the RAM Diversified Property Fund, a new defensive unlisted property fund.
RAM was attracted to the office campus because of its scope for short to medium-term positive leasing absorption with the benefit of long-dated income coverage from the outgoing vendor.
“The asset sits in a highly desirable and in-demand fringe CBD location that is expected to benefit from favourable planning outcomes that will allow increased site density and the variety of uses permitted,” Gray said.
“Ultimately it’s a significant land holding in a prime CBD fringe location with attractive long-term value-add potential and is immediately income generative.”
RAM recently picked up the Alan Woods office building in Canberra for $115 million, while it also launched its first REIT, the $521.1 million RAM Essential Services Property Fund, adding to the growing institutional popularity of daily needs and healthcare tenanted real estate. It bought two further healthcare assets from Centuria Healthcare last month.
Also along the Brisbane city fringe, Forza Capital recently divested a Queensland government-tenanted building for $34.7 million, more than $10 million above what it paid for the South Brisbane asset less than three years ago, while ASX-listed Irongate bought a Cannon Hill building for $36 million, at an initial yield of 5.0%.
