This article is from the Australian Property Journal archive
LOCAL private investor and developer HSA Capital has swooped on an office building with future development potential in Doncaster in an off-market deal worth $16.1 million.
Colliers International’s Peter Bremner and Nick Rathgeber have negotiated the sale of 90-94 Tram Rd Doncaster in Melbourne’s eastern suburbs on behalf of the Juilliard Group.
They said Juilliard has owned the property since 1999 and the group decided to sell after recently receiving a number of unsolicited approaches.
Although it was offered as a secure land bank opportunity with future development potential, the sale represents a passing yield of 6.87% and capital value rate of $4,637 per sqm.
“The property was purchased by HSA Capital Pty Ltd, a local private investor and developer who has been looking for a good suburban office for a while and liked the high underlying land value on offer at this site,” Bremner said. “The ongoing growth and popularity of Doncaster, a suburb full of apartments under construction and future development potential, was also a strong factor,”
“There was a premium attributed to this elevated property on Doncaster Hill, as the high underlying land value and prospects for future multi-storey residential development offered buyers multiple options in the medium to long term,” he added.
The three-level office building comprises 3,472 sqm of office space and 111 on-site car spaces on a 4,097 sqm site. It is fully leased to four tenants, including The Laminex Group, which occupies more than 70% of the building and has been a tenant for over 15 years. Other tenants include Dun & Bradstreet , Professional Services Corporation and Metro Media. The current net passing income is approximately $1.106 million p.a.
Bremner said the property represented an ideal land banking opportunity.
“It has an exceptionally high underlying land value which is arguably close to the investment value of the property. The enormous site area of 4,097 sqm enables a range of alternative future development scenarios.
“The property is situated within the Doncaster Activity Centre Zone, in a prominent main Rd location with a substantial frontage of just over 70m.
“The City of Manningham has been actively promoting the Doncaster Hill Strategy since 2002. The strategy provides an integrated planning approach to creating a sustainable, contemporary mixed-use centre, comprising apartment-style living opportunities, retail, commercial, social, community and entertainment facilities,” he added.
Australian Property Journal
