Property fund manager Centuria is moving ahead with plans to sell the KSD1 office complex in Brisbane, the national headquarters of Domino’s Pizza, with price expectations of $85 million.
The decision to sell follows the Centuria-run trust’s acquisition of the Hines Global REIT portfolio last year, moving quickly to reweight assets.
The 15,300sq m site, located at 438-517 Kingsford Smith Drive in the north Brisbane suburb of Hamilton, offers 9,274sq m of lettable area across two modern buildings completed in 2013.
The building, known as KSD1, is also home to developer Devine Group, Collins Restaurants Management and Woolworths Group with a weighted average lease expiry of six years.
The asset is held by Centuria Metropolitan REIT, which mooted the sale last week with its annual results as part of its portfolio repositioning program.
CBRE’s Tom Phipps, Flint Davidson and Adelaide O’Brien and Cushman & Wakefield’s Peter Court and Mike Walsh have been enlisted by Centuria to sell the property.
CBRE senior director Tom Phipps said the scarcity of institutional grade stock in the Brisbane market made KSD1 attractive to buyers.
“With limited institutional grade stock available in metropolitan markets around the country and the cost of debt at record lows, we expect KSD1 to receive strong interest from buyers looking for income and growth,” Phipps said.
“The anchor tenant, Domino’s, is committed to the building until 2028 positioning the asset to capitalise on the ‘super urbanisation’ of the $5 billion Hamilton Northshore precinct, which is set to deliver housing for approximately 15,000 people and office accommodation for 10,000 workers daily across the 304 hectare site.”
Cushman’s Peter Court said the building’s highly visible site on one of Brisbane’s busiest arterial roads, linking the airport and Trade Coast with the CBD, would help underpin buyer interest.
“The property’s high-quality, campus style accommodation, sustainability credentials and opportunities to add value will be key buyer draw cards, underpinned by the strong forecast population growth in the Hamilton precinct,” Court said.
Centuria, led by John McBain, posted a statutory net profit after tax of $50.9 million, down from $54.8 million the previous year. Operating profit of about $45.7 million was slightly above the $45.1 million recorded in 2018.
Its portfolio currently has a book value of $1.4 billion, occupancy of 98.4 per cent and a WALE of 3.9 years.