Alceon offloads another Lutwyche asset

The office was converted into a gym, occupied by Fitness First since 2006.

Alceon has offloaded the second of two Lutwyche offices held since 2018.

The double storey building on a 2602 square metre District Centre 2 zoned block at 461-463 Lutwyche Road is trading to Perth-based fund manager Property & Pathways for $16.875 million reflecting a 6.1 per cent net passing yield.

Containing 3217 sqm, the space was converted into a gym, with a 20-metre indoor heated pool and creche, and has been occupied by Fitness First since 2006; it recently underwent a major upgrade and was marketing as needing no capital expenditure.

There are also 82 basement car parks.

Knight Frank’s Matt Barker and Blake Goddard brokered the off-market deal.

Deal is final piece in the puzzle: Alceon

Sydney based Alceon acquired the Fitness First complex and the neighbouring office (467-473 Lutwyche Rd) for $25.9m.

It later moved the tenant in the latter building, Ladbrokes, to the vacant component of a Bowen Hills asset it owned, which in 2019 was sold to Centuria for $65.4m.

Two years ago, Alceon offered both Lutwyche properties, divesting 467-473 Lutwyche Rd to an occupier, disability services provider CO.AS.IT, for $11.25m.

In a major growth corridor six kilometres north of Brisbane, 461-463 Lutwyche Rd, on the north east corner of High Street, has significant high density residential development upside once Fitness First’s lease expires in 2028 (story continues below).

Properties & Pathways trust oversubscribed in a day

Properties & Pathways will hold 461-463 Lutwyche Rd in a single asset fund – the Pathway 19 Unit Trust – which is promising a 6.5pc cash return average, for a five year term.

The trust closed oversubscribed in 24 hours.

“The asset offered a highly secure income…with a 6.3 year Weighted Average Lease Expiry, and fixed three per cent annual rent reviews, with a below market rental profile providing significant reversion potential,” Mr Barker said.

“The property’s fundamentals, including large floor plates, excellent natural light and a high exposure corner position, also provide the opportunity for adaptive re-use for other occupiers including medical, office and other similar users,” according to the agent, if Fitness First moves out.

“The elevated site is zoned District Centre 2, providing long-term development potential in a strong performing inner-city precinct,” he added.

It is also an affluent location, Mr Goddard said, with the recently refurbished triple supermarket anchored Market Central Lutwyche a two minute drive away.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of