LaSalle Buys Brisbane Office Building For $57 Million

LaSalle Investment Management has purchased The Commonwealth Government Building in Upper Mount Gravatt Brisbane for approximately $57 million, representing an initial passing yield of just over 8 per cent. The fully leased six level A Grade office building has a total NLA of 14,286sqm and 401 car parking bays. The Commonwealth of Australia (Australian Tax Office) occupies 99.9 per cent of the building, on an 8.5 year term with a 5 year option, which commenced in July 2012. It was purposely built for the ATO in 1992. Tom Barr and Don Mackenzie of Colliers International were exclusively appointed and marketed the property to selected parties via an off-market expression of interest campaign. Mr Barr said the asset is one of a kind investment opportunity in the region that offers cash flow security underpinned by the Commonwealth of Australia. “Government leased assets of scale (local, state and Commonwealth) across the country are very favourable to institutional investors, particularly in the present economic environment. &quot;And this asset was no different. Recently we have seen many government leased assets trade across Australia, and we expect strong interest in these assets to continue in 2016. “The campaign received a lot of attention from both domestic and offshore institutions, and some of the larger syndicators. &quot;Of the bids we received, half were from offshore groups or were offshore groups with domestic MIT representation. “This is in keeping with the broader trend evident throughout 2015, where nationally we saw offshore capital increasingly partnering with domestic institutions because of their knowledge and expertise in Australian commercial property. “LaSalle Investment Management was seeking value-add and opportunistic assets for one of their Asian funds, achieving higher risk – higher return. &quot;They were attracted to 28 Macgregor Street for its strong tenant covenant, future development potential, and high profile position in a growth precinct that is surrounded by significant public amenity and infrastructure,” said Mr Barr. Mr Mackenzie said the building has recently undergone a major refurbishment and modernisation program as well as mechanical services upgrade achieving a 4.5 star NABERS Energy rating, which were all factors that appealed to the buyer. “In addition to these benefits, the asset also provides competitive operating costs due to modern services, as well as depreciation benefits, increasing the tax effective return of the investment,” said Mr Mackenzie.

LaSalle Buys Brisbane Office Building For $57 Million

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