Blackstone offloads Canberra office

The property underwent a $12.6m refurbishment in 2019.

Blackstone has sold an A-grade Canberra office it picked up 10 years ago through its $207 million takeover of Valad Property Group.

The four level complex, 38 Sydney Avenue, Forest, is trading to Irongate Gate (IAP) for $73.75m.

The 8901 square metre investment, with ground floor retail and 68 car parks, carries a vacancy of 44pc which the vendor backed with a two year rental guarantee.

On that basis, the price reflects a 5.13 per cent yield.

IAP today launched a $50m placement to help fund it.

CBRE’s Scott Gray-Spencer and Kenny Duncanson brokered the off-market sale. Colleagues Zoe Ferrari and Troy Markos with Raine & Horne Commercial’s Michael Ceacis and Michael LoPilato are managing the leasing.

Forest is about 500 metres from Parliament House.

38 Sydney Avenue, Forest

The Sydney Ave property was purpose built for the federal government in 1997 and initially held by Mirvac (story continues below).

The property contains ground floor retail off an outdoor seating area.

It was valued at $35.1m 10 years ago.

Blackstone unsuccessfully tried to sell it as part of a c$500m-plus portfolio in 2016.

The only office occupier, the Australian National Audit Office, has 13.5 years left on a lease.

Factoring the vendor’s rental guarantee, the Weighted Average Lease Expiry is 8.5 years.

“This transaction builds on IAP’s track record of acquiring strategically located, good quality income-producing properties,” chief executive office Graeme Katz said.

“The property has had approximately $12.6m spent on fit out and refurbishment works in the last two years including a full atrium lobby upgrade, the addition of end-of-trip facilities and refurbishment of on floor amenities,” he added.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.