This article is from the Australian Property Journal archive
ASX-listed Garda has bought a Melbourne office building for $20.1 million from Servier, at an 8.6% discount to independent valuation, with Servier moving from the Hawthorn East digs to Garda’s Botanicca 9 building closer to the city.
The 8-10 Cato Street property in Hawthorn East was purpose-built for Servier Laboratories in 2001. It has a four-level building with 2,717 sqm of office space, 937 sqm of warehousing and 105 car parks across two basement levels.
The property includes a 1,124 sqm land parcel improved with bitumen and boom gate, providing a further 31 car parks.
An independent valuation booked the property at $22.0 million, consisting of $16 million on a cap rate of 6.00%, and $6 million for the additional block of land.
“Both portions established building and the vacant land parcel have their own vehicle access from Cato Street and when combined, provide future redevelopment potential,” Garda said.
Upon settlement in March and prior to leasing, Garda will complete a building modernisation capital works program including the installation of a lift. It expects the building to deliver about $1.4 million in annual net property income and when fully leased.
Servier will be set up in 702 sqm at Botanicca 9 in Richmond from April, and Berry Street has also just signed on. The leases taking the building to 65% occupied and with a 6.1 year weighted average lease expiry. There is 2,769 sqm remaining for rent.
Garda’s portfolio grew to $558.9 million in the first half, following a $67.7 million valuation uplift across nine of its 12 assets, with most of the uplift seen in its industrial properties.
“Since the October valuation, a number of market transactions continue to indicate strong tailwinds, signalling further growth in asset prices,” it said.
Funds from operations for the first half dipped slightly to just over $8 million, and FFO per security to 3.836c. Distributions was over $7.5 million, and steady at 3.6c on a per security basis.
Net profit after tax lifted to $64.7 million from $10.4 million.
Net tangible assets per security lifted 18.6% to $1.72.
Its entire portfolio has 94% occupancy and a cap rate of 5.27%.
