The adjoining buildings include the Health House and Forestry House, situated at 147-163 Charlotte Street and 146-160 Mary Street (above) respectively.
Cromwell Property Group CEO, Paul Weightman said the purchase demonstrates Cromwell’s ability to acquire and add value to commercial property assets.
“This is an acquisition by Cromwell of well located assets that provide an excellent passing yield,” said Mr Weightman.
The properties each have 17 levels of office space, a combined lettable area of 26,651 square metres, 276 car parks and a land area of 3,449 square metres.
Both buildings are currently leased to the Queensland State Government, with the lease of Health House expiring in July 2015 and Foresty House in November 2017.
The current income of the properties is approximately $13.5 million, representing an initial passing yield of 20% on the purchase price.
“We believe that there is substantial upside potential which can be realised on expiry of the current leases in many ways,” said Mr Weightman.
The transaction will be funded by existing cash reserves, with Cromwell expecting an increase in forecast earnings for FY14 from 8.0 cents to at least 8.3 cents per security.
Distribution guidance for FY14 remains the same at 7.5 cents per security.
The acquisition will not materially impact net tangible assets per security and will result in a slight increase in pro forma from 43% to 45%.