This article is from the Australian Property Journal archive
LENDLEASE has confirmed the sale of the Alan Woods office building in Canberra for $115.1 million to an RAM Australia fund, as it turns its focus towards redevelopment of an expanded Melbourne asset.
In the heart of the national capital, the A-grade building at 25 Constitution Avenue was held by Lendlease’s unlisted Australian Prime Property Fund Commercial, which undertook an extensive refurbishment and secured the federal government as a tenant in March across 7,150 sqm that took the asset to 100% occupation.
Upgrades included a full façade replacement, upgraded foyers and new end-of-trip facilities with secure parking for 100 bikes.
On the buy-side, 25 Constitution becomes the RAM Australia Diversified Property Fund’s second government tenanted building in the unlisted fund, mandated to deliver “resilient long term returns with exposure to de-risked property sectors and tenant profiles”.
JLL’s Tim Mutton and Luke Billiau, and CBRE’s James Parry and Nic Purdue managed the sale on behalf of APPF Commercial.
“This strategic divestment leveraged the success of our focused repositioning and leasing strategy for the asset to achieve an attractive total return outcome for our investors,” Scott Mosely, managing director, investment management said.
“APPF Commercial will continue to recycle capital into precincts that are highly sustainable and offer exceptional amenity, flexibility and connectivity to create a fantastic work-life experience for our customers.
The divestment follows APPF Commercial’s mid-year acquisition of 469 La Trobe Street in Melbourne, next to its existing 485 La Trobe asset. Lendlease said that provides the opportunity to “create the Flagstaff sub-market’s flagship office precinct, providing long-term strategic options by creating a scarce circa 5,000 sqm combined landholding with direct parkland frontage within the Melbourne CBD grid”.
Moseley said the redevelopment would activate the laneways surrounding these buildings and capitalise “on the unique wellness benefits our customers have with Flagstaff Gardens on their doorstep”.
Canberra office hot property
Canberra’s resilient office market has seen the vacancies fall to a 12-year low due to the heavy presence of government tenants, and ACT buildings leased to government tenants have proven to be hot property in 2021. Yields have tightened by 50 basis points for prime assets.
Property powerhouse Charter Hall has been a major player, buying the Doris Blackburn building at 18 Canberra Avenue from developer DOMA, and the six-level campus-style Services Australia in Tuggeranong for $306 million,
Sentinel Group has acquired the nation’s control centre for the COVID response for $83 million, and ASX-listed Irongate Group paid $74 million for the home of the federal government’s Australian National Audit Office.
