This article is from the Australian Property Journal archive
FUNDS manager Arcana Capital, led by former Queensland Premier Campbell Newman, has sealed the deal to buy a government-anchored commercial office building in the national capital for $17.4 million.
Investor relations manager Colby Phillis said the transaction reflects a cap rate of over 9% on the fully leased net income.
“With parts of the nation’s capital in a significant growth phase, this quality asset represented a great opportunity for capital uplift through leasing, whilst providing a forecast starting distribution of 8% p.a. for wholesale investors,” said Phillis.
Located at 2-6 Shea Street Phillip, 9km south east of Canberra, the building was constructed in late 2010 on a significant land holding in the heart of the rapidly growing Woden Valley satellite city.
Currently at 62.4% occupancy – with a two-year rent guarantee over the remaining vacancy – Phillis said Arcana will seek to fill the property’s vacancy as soon as possible and anticipates that the successful leasing will elevate the property’s capital value to align with comparable recent sales (approx. 6.75 – 8.00% net yield) and reinforce the net income. The property currently has a 3.03-year WALE.
The building is currently occupied by a mix of government and national commercial tenants, including anchor tenants Aboriginal Hostels Limited – a not-for-profit company wholly owned by the Australian Federal Government – and Suncorp.
Furthermore, the facility is highly accessible, with 124 car parks (1 per 33 sqm of NLA).
Arcana has had an active 2023, earlier this year, the group bought two fully leased and strategically located office buildings in Brisbane and Perth for a total of $25.55 million, increasing its management to 32 properties worth $230 million and raising over $123 million in investor equity.
