A strata titled office spreading the second floor of a contemporary office in Brisbane’s inner-city Spring Hill has sold for $5 million.
The sale of level two, 150-170 Leichhardt Street (pictured above, outlined), is the biggest strata transaction struck in Queensland this year, according to the selling agency.
The 1374 square metre space, with a 22 sqm balcony and nine car parks is tenanted to Image Education Australia for seven more years.
IEA then has the option to stay until 2029.
Based on the rent the occupier pays ($549,196), the deal is being struck on a 10.1 per cent passing yield.
The Sydney-based purchaser, in the finance industry, had never invested in Queensland commercial property before this.
“He was particularly attracted by the levered cash-on-cash return the property could deliver,” Mr Biggins said.
“The strength of the covenant was particularly appealing considering the education sector tenant is a well-established business operating campuses across Gold Coast and Brisbane since 2005 and are currently experiencing significant growth.
“With current record low interest rates and decreasing vacancy rates in the Brisbane office sector, we are continuing to see interstate investors looking to Brisbane, attracted by the yield differential and growth prospects over the southern markets,” Mr Biggins said.
The office was offered with a 9B Compliance, allowing it to be used for education purposes.
The Leichhardt Street property is a ten minute walk to Brisbane Central train station and Queen Street Mall, in the Brisbane CBD.
Brisbane strata stats
Based on eight Brisbane strata office sales of between $500,000 and $5 million, executed by Colliers International this year, space is valued at about $3851 per sqm.
The sales were struck at an average 7.88 per cent yield.
“Long term investors are backing the strata market, but sales to owner occupiers are also on the rise as the leasing market continues to improve in combination with record low interest rates,” Mr Wang said.
“The major infrastructure boom in Brisbane has had a very positive impact on business and buyer sentiment.
“Strata office sales within the golden triangle precinct have performed very well,” Mr Wang added.
“Within 97 Creek Street Colliers International’s Strata team have sold four offices so far this year ranging from 63sqm up to a full floor of 638sqm. One of the office investments had achieved a record 6.2% yield”.
AIMS manages 170 Leichhardt Street, Spring Hill, for one of its unlisted funds.
AIMS has more than $2 billion worth of assets under management in the Asia Pacific.