This article is from the Australian Property Journal archive
UNLISTED property fund manager ISPT is preparing to sell two suburban Melbourne police station assets with expectations of circa $10 million each.
Victoria Police is longstanding occupier both 1-7 Coventry Street in the south east suburb of Narre Warren, and 151 Centenary Drive, in the north east’s Mill Park.
ISPT fund manager Georgina Bishop said a rebalancing of ISPT’s CIB Fund, which controls a portfolio of Victorian law courts and police stations, had spurred the sale campaign.
“The strong performance of the fund and some recent acquisitions have prompted the decision to sell the Narre Warren and Mill Park assets, which have been identified as highly appealing given their tenancy covenants and future potential,” she said.
The Narre Warren and Mill Park properties are predominantly office buildings for administration and dispatch purposes and have building areas of 2,099 sqm and 2,123 sqm respectively, including meeting rooms, public reception areas and some on-site holding cells.
The properties offer current lease terms until December 2025 with no further options. Narre Warren occupies a corner site of 3,619 sqm and returns net annual income of $615,688, while Mill Park occupies a 6,173 sqm landholding and brings $648,654. They are respectively close to Westfield Fountain Gate and Westfield Plenty Valley.
CBRE’s capital markets agents Tom Ryan and Scott Orchard, together with Sandro Peluso and Jimmy Tat of CBRE’s social infrastructure team, have been appointed to steer the expressions of interest campaign.
Ryan said the Victorian state government leases, extensive landholdings and improvements would be key buyer drawcards.
“Police station freeholds are seldom offered for sale, with the campaign also coinciding with increased buyer demand for robust tenant profiles in the wake of the pandemic.”
Peluso said there has been an investor gravitation towards social service and social infrastructure properties in recent years as investors seek to strengthen the ESG credentials of their portfolios, with the replacement costs and future possibilities of each asset making the investment case very compelling.
Expressions of interest close 22nd June.
Melbourne’s only Family Court of Australia outside of the CBD changed hands 12 months ago for $12 million, on a yield of 6.5%. The Dandenong building is leased to the Commonwealth government until July 2023 with no option.
