Centuria Diversified Property Fund (CDPF) has added twin suburban Melbourne offices to its mushrooming real estate portfolio.
CDPF is paying Stronghold Investment Services $27.8 million for the neighbouring buildings at 13-15 Compark Circuit in Mulgrave.
The vendor paid $21.5 million for them in early 2017.
Covering a site area totalling 8334 sqm, the offices contain 5851 sqm of lettable area – all of which is tenanted.
Based on the annual net rental return ($1,7373,848), the dual-building asset is exchanging on a 6.25 per cent passing yield.
The public sale campaign attracted six offers and 198 enquiries, according to Knight Frank’s Tom Ryan and Tim Grant, who represented Stronghold with Dawkins Occhuito’s Andrew Dawkins and Chris Jones.
Centuria Diversified Property Fund
This deal – CDPF’s fourth direct acquisition – sees a Sydney investor buy a Melbourne asset from a Brisbane vendor.
It is anticipated to settle early next year.
At that time, CDPF’s property portfolio will be worth just over $200 million.
CDPF, an entity of the ASX-listed Centuria Capital Group (CNI), will control assets worth $6.7 billion.
The properties: 13-15 Compark Circuit, Mulgrave
Within the high-tech focused and valuable Monash Employment Precinct, 21 kilometres south east of the CBD, the freestanding A-grade buildings include parking for 226 cars, many within a basement.
This is a high proportion of car parks for an office this size, according to the agents, equating to 3.9 spaces per 100 sqm of area.
British personal healthcare giant PZ Cussons, prestige home builder, Carter Grange, and Tyco/Johnsons Controls, are amongst the occupiers at 13-15 Compark Circuit.
The agents marketed the staggered lease expiries of the various tenants to risk averse investors.
Centuria said the Mulgrave office could be efficiently subdivided if required.
Though the buildings are considered too valuable to replace at present, the land they occupy is zoned Special Use, meaning a variety of redevelopment outcomes could be considered longer term using the airspace.
This holding is less than 500 metres from the intersection of Springvale and Wellington Roads (both these roads have bus services).
The Princes Highway, Monash Freeway and Eastlink are close by, the agents added.
“The Monash precinct contributes AUD $9.4 billion to the Victorian economy each year, supports more than 13,000 businesses and employs more than 82,000 people,” a Centuria statement said.
“Commercial real estate remains an attractive opportunity and we believe this acquisition is well positioned to retain and attract the long-term quality tenants that contribute to sustainable income streams”.
Centuria’s joint chief executive officer Jason Huljich added the company continues to source compelling unlisted opportunities in a low-term deposit and low-rate environment.
“CDPF aims to offer direct property investment with a minimum investment of only $10,000,” the director said.
“The Fund is open-ended, offers limited monthly liquidity, and sits on a number of platforms, so it is easy for advisers and investors to access.”