This article is from the Australian Property Journal archive
MELBOURNE’S Gunn family owned PGA Properties has paid $27 million for a commercial office building at 136 Exhibition Street, on an initial yield of 6.6% and a capital value of around $3,700 sqm.
The property was sold by Brisbane based fund manager Opus Capital Limited and was the final asset in the Opus Property Trust No.15 fund.
This is the PGA’s third Melbourne CBD office asset, the group also owns 393 Swanston Street and 51 Queen Street.
136 Exhibition Street is an 11-level commercial office building which has a net lettable area of 7,350 sqm. The property recently completed a full building refurbishment.
Opus Capital CEO Dean Palmer said the building has been sold at close to 100% occupancy which has been a significant factor in achieving such a favourable outcome.
“This is a sound result for Opus No. 15. The sale reflects a premium of about $1 million above the most recent book value and is demonstrative of the state of the Melbourne CBD investment market.
“There is good demand from investors for buildings in this price range which naturally results in buyer competition and has enabled this positive sale outcome – the best seen for a B Grade building since 2007 in this property market,” he added.
“Property in the Melbourne office market has become sought after more recently and is presenting significant medium term rent and capital growth prospects. This is a good time to sell to realise a good return for our unitholders,” Palmer continued.
The deal was negotiated by Colliers International’s institutional investment services director Nick Rathgeber and associate director Matthew Stagg.
Rathgeber said the deal confirms that the honeymoon appears over for counter-cyclical buyers in Melbourne for assets across all grades and price points.
“The encouraging thing for the buyer is that there is still significant medium term rent and capital growth prospects,” he concluded.
Australian Property Journal
