This article is from the Australian Property Journal archive
FKP Property Trust has bought a $30 million commercial office building in Melbourne’s CBD and a $45 million homemaker centre in Browns Plains in Brisbane.
FKP Property Group Fund Manager Adam Learmonth said the acquisitions provide significant diversification for the FKP Property Trust with commercial and retail assets located within key growth markets along the Australian East Coast.
The additional acquisitions will increase the value of properties owned by FKP Property Trust to approximately $200 million, bringing the total assets managed by FKP Funds Management to 12 or $360 million.
Located within the legal and education precincts of Melbourne CBD, 399 Lonsdale Street comprises 10,176 sqm of office and retail space and features efficient floor plates of approximately 950 sqm.
The property is currently 100% leased until January 2009 to Taylors Institute of Advanced Studies Limited which operates Taylors College, a non government educational institution.
The sale was negotiated by Peter Weatherby and Rob Harrington of Fitzroys, on behalf of the vendor, The CASS Foundation Ltd a private philanthropic Foundation, after a national marketing campaign which identified a number of prospective purchasers both institutional and private.
The purchase price represents a price per square metre of $2,965 and initial passing yield of 7.3%.
Learmonth said the acquisition re-establishes a Melbourne commercial allocation for the portfolio following the sale of 31 Queen Street in February 2006.
“The high quality accommodation and technical specifications of the property provides the Funds Management team with the ability to execute a number of value add opportunities,” Learmonth said.
Settlement is due in October 2006.
FKP Property Trust’s second acquisition involves the $45 million purchase of the Browns Plains Homemaker Centre. The property consists of 18,700 sqm of bulky goods retail, anchored by major tenant Bunnings, as well as an additional 10.5 ha of adjoining land.
Learmonth said the Browns Plains Homemaker Centre is ideally located in Brisbane’s southern growth corridor and within a growing trade area that is currently under-serviced by the existing fragmented homemaker offering.
UrbisJHD Research indicates that within the immediate catchment area spending on bulky goods and homewares represents $318 million per year and is expected to grow in excess of 5.6% per annum for the next four years.
As part of the broader masterplan for the site FKP will look to capitalise on its expertise to integrate the adjoining land creating a high quality, consolidated bulky goods estate.
“The masterplan for the Homemaker Centre delivers an extra 31,000 sq m of bulky goods and convenience retailing, providing tenants and customers with a convenient and consolidated homemaker offering adjoining the existing regional shopping centre.”
Fitzroys Rob Harrington concluded that Fitzroys has achieved considerable success with Melboourne CBD sales of late including a potential future development site leased to Holding Redlich lawyers at 350 William Street which sold for $12,800,000 on a yield of 7.62% ($5,000 per sq m of land), and the Mitre Tavern which recently sold for close to $5,000,000 with a number of other sales shortly to be announced.
By Ted McDonnell
