Sale of Teneriffe character office building had interstate fund managers listening
A WEST Australian-based fund manager has beaten a host of competitors for a four-level character office building in the “hottest mixed-use precinct in Brisbane”.
A WEST Australian-based fund manager has beaten a host of competitors for a four-level character office building in a growing urban renewal precinct.
Primewest paid $20.35 million for a former woolstore building at 130 Commercial Rd, Teneriffe, anchored by Nova FM radio station.
Primewest capital transactions manager Will Johns said the fund manager was typically attracted to value-add opportunities.
“We’re excited about the opportunity. It’s a great character building in an up-and-coming location and we’re excited about what we can do with it,” he said.
The expressions of interest campaign, run by CBRE’s Mike Walsh and Peter Court, attracted 70 inquiries and nine bids.
Mr Walsh said the structured three-week campaign focused on interstate fund managers who were most likely to aggressively pursue the asset.
“The strong response to the campaign can largely be attributed to the unique characteristics of 130 Commercial Rd being the heritage nature of the asset ensuring a landlord is not competing with other homogenous office buildings,” Mr Walsh said.
“Additionally, the location, value-add potential and price point of the property added further appeal.”
The flagship property last changed hands in 2015 for $16.75 million in a deal also struck by CBRE.
The building has 4258sq m of net lettable area and recent building works include a revamped foyer. It was sold with about 35 per cent vacancy and a weighted average lease expiry of 3.4 years.
The property was sold with a one-year rental guarantee ensuring a fully leased yield of 8.96 per cent. The initial yield excluding the rental guarantee was 5.38 per cent.
Mr Court said the building was in the hottest mixed-use precinct in Brisbane and within walking distance of an array of array of dining, retail, entertainment and transport offerings.
“A perception of a lack of parking was not a problem,” he said.
“Also, AMP Capital’s purchase of Aveo’s Gasworks Plaza retail and office complex nearby late last year made a lot of people take notice of the precinct.
“That meant the bids came form a cross section of fund managers and privates.”
