Fourteen months after it listed the office for sale, City of Brisbane Investment Corporation has found a buyer for its South Regional Business Centre in Yeerongpilly.
The seven year old uber-green commercial building traded for $35.25 million – the upper end of the vendor’s expectation.
The purchaser is Ascot Capital which last month sold an industrial investment co-owned with Sentinel Property Group in Brisbane’s outer south Crestmead for $15.5 million and in January bought a Port Macquarie office from Sentinel for $37.9 million.
CBIC has been acquisitive, too, last May paying $44.3 million for a seven storey, 5476 square metre commercial building at 9 George Street, Parramatta, west of Sydney.
Established in 2008 to invest Brisbane City Council funds, its property portfolio includes another New South Wales office, in Gosford, acquired in 2018, and seven Queensland commercial assets including Chermside’s North Regional Business Centre.
South Regional Business Centre trades on 6.5 per cent yield
Ascot Capital’s 665-681 Fairfield Road was purpose built for council, the only occupier.
Beside the Yeerongpilly train station, it includes 4198 sqm of A-graded office area over three floors. The site area is 3600 sqm.
Based on the current annual net rental return ($2.29 million), the Western Australia based investor is buying the office on a 6.5 per cent yield
In 2027, the tenant can exercise the first of its two five-year renewal options.
About 300 council staff relocated to the facility from customer service centres at Inala, Mt Gravatt, Sunnybank Hills Shoppingtown and Wynnum.
When the Yeerongpilly office opened, the occupier spruiked the building’s 4-star NABERS energy rating, ability recycle rain water and double glazed windows.
Constructed just after Brisbane’s 2011 floods, CBIC also fitted stormwater non-return valves and a car park sump pump. The basement has flood gates, too.
Yeerongpilly Green, an $850 million master-planned mixed-use development is under construction across the road (the SRBC will overlook the town centre component of that project).
CBIC looking at southern states for next investment
CBIC acting chief executive officer Kirsty Rourke said “over the past year, [the company] has divested several assets…in order to broaden its investments across asset class, sector and geography.
“As part of our strategic vision, we are looking to diversify into markets in other locations, including the Sydney and Melbourne metro areas.
“Rebalancing our investments will solidify the fund’s risk profile as well as its prospects for the continued strong performance CBIC has enjoyed over the past decade,” Ms Rourke said.
Mr Walsh said the expressions of interest campaign generated 13 bids from a mix of domestic and offshore parties.
“Investors were clearly attracted to the government-backed lease covenant, long term tenure and net lease structure, and given the current climate we expect the market will place a more heightened focus on security of income and covenant moving forward,” the broker added.