This article is from the Australian Property Journal archive
A BUILDING in Cairns currently leased by the Australian Federal Police has sold for $17 million following a campaign run by Knight Frank and CBRE.
It has been purchased by a NSW-based investor off a Victorian investor in a sale that’s returned a yield of 6.5%.
The property located at 420-422 Sheridan Street in Cairns North has been leased to the AFP since 2014. The lease is 15 years long with two five-year options in the AFP’s favour. It was built to a standard high enough to achieve a 5-star NABERS rating. It adjoins the Cairns airport and its location is well suited to the AFP’s desire for close access to transport infrastructure.
Knight Frank Queensland’s Christian Sandstrom and Greg Wood worked together with Danny Betros of CBRE Cairns to manage the sales campaign. Sandstrom said it was an attractive investment opportunity which generated over 80 enquiries.
“At the close of the campaign seven offers were received and terms were agreed with a private investor from New South Wales on a cash unconditional basis,” he said
“This investor already owns a portfolio of government-leased assets and was attracted by the calibre of the Commonwealth tenant, high quality of the building and the fact that the property was purpose-designed and built for the AFP’s specific accommodation needs.
“In addition the property had a seven-year WALE and remaining options for 10 years.”
“The Melbourne-based owners were extremely pleased with the result especially given the two per cent increase in the official interest rate since they decided to divest the asset, which had been in their family since 2014.”
The future of the Cairns property is bright with Danny Betros suggesting that it’s a good city showing high potential for investors.
“Potentially there could be a building added at the back for offices or other required facilities,” he said.
“The site is of strategic importance for the AFP as it is in close proximity to the airport and the port activity in Cairns area.
“It is easily one of the most impressively deigned and fitted-out office complexes in Cairns, and it will suit the AFP’s operations for many years to come.
“Investor activity in the Cairns market continues to surge with Australia-wide interest being received on all sales campaigns at present.
“Investors are looking for better opportunities in high growth, strong regional markets like Cairns that are being well supported by continuing Government spending and investment in essential infrastructure.”
