Asset managers trade Monash office on double digit yield
Prime Value has divested a major Monash office after 10 years.
The asset manager is banking $25.175 million for 700 Springvale Road, Mulgrave.
New South Wales syndicator Tamim Asset Management, in its maiden Victorian play, is the buyer; it recently called on wholesale investors to back the buy via a single asset fund.
Nine per cent of the 6825 sqm of lettable area is vacant.
Based on the current net return – $2.3m per annum – the deal reflects a 9.3pc return.
When JLL’s Tim Carr, Josh Rutman and MingXuan Li listed the six storey office in October, they assumed a yearly fully let market rent of $2.55m – which would put the yield at 10.2pc.
Extension plan
Prime paid Garda $14.35m for 700 Springvale Rd, once known as the Criterion Building, in December, 2014; it was a touch less than the then ($14.55m) book value (story continues below).
Developed in 1991, renovated in 2015, it is leased to 10 tenants, amongst them, Bunzl, Gallagher and Monash Health. The weighted average lease expiry is short however – at 2.3 years.
On 9153 sqm, the site contains 344 car parks.
Tamin said the building, in the city’s revered Monash National Employment Cluster, the biggest employment zone outside the CBD, could be extended 3706-8040 sqm.
Longer term, it added, the pocket is set to benefit from the Suburban Rail Loop which has a c2035 completion date.
Mulgrave is 21 kilometres south east of town.
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