A fully-leased Milton office building has changed hands to a Sydney-based family investor with their sights set firmly on yield – brushing aside concerns of a vacancy rate blowout.
They paid $17.5 million for a small office building at 189 Coronation Drive, Milton after an expressions of interest campaign conducted by CBRE’s Mike Walsh and Peter Court.
Walsh said the four-week campaign generated more than 80 inquiries, mostly from interstate private investors and small syndication groups who were priced out of the Sydney and Melbourne markets.
“The overarching message from the sale process was very clear - the attraction of Brisbane on a risk-adjusted return basis remains too compelling for interstate investors to overlook, and specifically within the private market in the $10 million to $30 million price point.” he said.
“Our team currently has another $140 million worth of office deals in due diligence or about to exchange across five properties, all to Sydney and Melbourne buyers, and three of whom will be first-time entrants to the Brisbane market.
“It’s clear this appetite is unabated and we anticipate this to be a common theme for the balance of 2017.”
The three-storey building has a net lettable area of 2657sq m, 59 car parks and was sold on an initial yield of 7.44 per cent.
It is 100 per cent leased and at the point of sale it had a weighted average lease expiry of 3.9 years.
Court said the Milton office market faced challenges.
“Despite this, the fundamental quality and lack of expiry exposure in the short term at 189 Coronation Drive ensured there was strong market interest with multiple bids received at close,” he said.