This article is from the Australian Property Journal archive
A SYNDICATE of local investors are hoping their 13-year investment Adelaide’s commercial office building will deliver a windfall of more than $50 million.
The syndicate are selling 45 Grenfell Street located in Adelaide’s primary retail precinct with access to major hotel and leisure facilities, through agents JLL SA head of capital markets, Ben Parkinson and ACT head of capital markets, Tim Mutton and LJ Hooker’s Mario Bonomi and Mark Tettis.
The syndicate group at the time led by Bonomi, Kennedy & Co’s Paul Jorgensen and Martin Group’s Ron Martin bought the building in 2010 for $29 million on a yield of 10.75%.
The syndicate followed up with $43.1 million purchase of 101 Grenfell Street in 2013 and in 2015 paid $41.3 million 81 Flinders Street, both in the Adelaide CBD.
Parkinson said this one of the most significant assets to be offered in 2023 and is expecting it will be a major test for Adelaide’s commercial office market.
“Located in the core of Adelaide’s CBD precinct the 21-level building provides an exceptional opportunity to invest in a strategic upgrade to attract new tenants. The building offers an unrivalled location and unprecedented potential to reposition to create a long-term, high-quality investment.”
He added Adelaide has the second highest office occupancy rate in Australia and repurposed buildings offering office suites have emerged as popular with tenants.
Mutton said the building presents a unique opportunity to significantly add value, with the uplift potential via tactical repositioning of the asset through innovative refurbishment and contemporary spec suite design.
Bonomi said the building is 70% leased and offers a passing net income of $2.29 million (fully leased net income $3.85 million) with a two-year WALE (by revenue).
“The building has undergone $3 million of renovations and upgrades, bringing it up to a 3.5 Star NABERS Energy Rating following considerable mechanical upgrades. In addition, the ground floor retail is now connected to the public realm and offers end-of -trip facilities and bicycle parking,” he said.
Tettis said a further attraction for investors is that South Australia does not charge stamp duty for commercial property.
The international expression of interest closes Thursday 5 October 2023 at 3:00 pm (ACST).
