A fully leased commercial property in Albion has sold for $2.65 million to a Sunshine Coast private investor.
The 299 Sandgate Road property consists of two refurbished buildings and three tenants has income security from long term leases, with anchor tenant Discount Drug Stores on a lease agreement until 2036, inclusive of options.
The property has a gross leasable area of 486 square metres that was extensively refurbished by the previous owner through a substantial improvement of the tenancy mix. The leases were extended and the current annual net income is calculated at $204,409.
Stephen Kidd, Director of Retail Investments at Colliers International who exclusively marketed the property in an auction campaign, said it offers modest current rent levels which allow for solid long term income growth.
“The rents are pitched to reflect the early stages of urban renewal occurring within the new Albion Village precinct. Residential growth and rental growth will continue as older buildings around the railway station make way for higher density apartment living.”
“This property presents an investment size and a net return which far exceeds that of residential property or fixed interest, being ideal for long term investment.”
“We had over 100 enquiries for the property, mostly from private investors. It sold shortly after auction after several offers were received. We still have several buyers looking for good quality inner-city investment properties.”
“There are a lot of investors currently willing to spend up to $3 million for fully tenanted properties with long term leases in a good location. This property presented all of that and as a result was hotly contested.”
Mr Kidd said the property presents several exit strategies with the ability for new owners to break the two buildings into separate titles if required, subject to council approval.
“Albion area is experiencing a lot of residential and infrastructure development so there are also opportunities for future site amalgamation with adjoining owners.”
“Currently there are three tenants occupying the property, restaurant and bar Fiamma Trattoria, Discount Drug Stores and The Hudson sales office and display suite.”
“This will reduce to just two tenancies midway through 2016, once a 194 square metres tenancy currently occupied by The Hudson is vacated and tenancy amalgamation is completed, with Discount Drug Stores expanding into this space on their departure.”
The national pharmacy retailer, Discount Drug Stores, is on a seven year lease with five plus five year options which commenced in June 2012.
Restaurant and Bar Fiamma Trattoria, occupies a gross leasable area of 194 square metres and has the space leased for five years, also with five plus five year options, which commenced in October 2013.