This article is from the Australian Property Journal archive
SYDNEY-based investor and funds manager Marprop has snapped up the home of the Newcastle Family Law Courts and an adjoining office building for $35.3 million.
They were offloaded by private syndicator Eagle Property Group after it secured a new 15-year lease to the Federal Government across 56% of the total space.
Located at 51-55 Bolton St and the 61 Bolton St court building, the buildings have a total lettable area of 6,142sqm and include 85 car spaces. They are 100% occupied and offer a weighted average lease expiry of 8.7 years, including the federal government lease for the Newcastle Family Law Courts at number 61.
Other tenants include the NSW state government’s legal aid department, WSP, Braye Cragg Solicitors and DXC Technologies. The sale was transacted on an initial yield of 6.5%.
With backing from German fund manager GLL Real Estate partners, Marprop picked up 120 Harbour Esp in Melbourne’s Docklands last year for 2019 for about $80 million, after it paid $59 million for a 13 level office building at 14 Moore St and $20.65 million for 17 Moore St in Canberra earlier in the year.
They followed the acquisitions of 541 St Kilda Rd in Melbourne and 157 Walker St in North Sydney in 2018.
The Newcastle deal was handled by CBRE’s Scott Gray-Spencer and Jack Morrison in conjunction with the Commercial Collective’s Matt Kearney.
Eagle Property Group had acquired the buildings with just a few years left to run on the existing federal government lease.
“The new commitment was a key attraction for prospective purchasers, with strong demand for investment grade assets underpinned by long-term government leases,” Gray-Spencer said.
He noted that there was potential for repositioning, cosmetic refurbishment and the potential expansion of the existing structures onto additional land at the rear.
The evolving Newcastle CBD location was another buyer drawcard. Several development projects are taking place in the immediate vicinity, including Doma Group’s $200 million The Store mixed use project that will deliver a master planned mixed use project on 12,000 sqm of land, including new 15,000 sqm A grade office building, residential, retail space, and a new bus interchange.
