This article is from the Australian Property Journal archive
LISTED property group Garda has sold a fully-occupied and long WALE office building in Melbourne’s Box Hill for a discount price of $40.3 million.
Executive chairman Matthew Madsen said the sale of Box Hill is consistent with GARDA’s asset recycling program.
“Ultimately the capital from the sale of this mature asset will be applied to GARDA’s substantial industrial development pipeline which provides a compelling yield on cost,” he added.
Despite boasting a 100% occupancy rate with a WALE of 7.9 years, the 436 Elgar Road property was sold at a 5.9% initial yield and 14% discount to book value of $47 million.
Garda acquired the asset in 2007 and it was valued at $18.5 million on a 9% cap rate at the time of its IPO in July 2015.
Settlement is scheduled to occur on 3 April 2023 and the net sale proceeds will be used to reduce GARDA’s drawn debt to $214.8 million. GARDA’s debt facility limit will remain at $290.0 million.
Recently Colliers forecast office capital values will drop by an average of 10% from peak to trough, before the market continues its recovery in 2024.
As part of its pivot to industrial, Garda recently launched a campaign to divest 67 Noosa Street, Heathwood and 1-9 Kellar St, Berrinba, which have a combined book value of approximately $32.0 million.
