Centuria’s Diversified Property Fund is paying $35 million for Canberra’s Optus Centre.
The office was sold by Melbourne-based Quintessential Equity Diversified Commercial Property Group, which acquired it from AMP Capital for $18 million in 2014.
In Canberra’s Civic precinct, the six-storey complex at 10 Moore Street contains 6709 square metres of lettable area and is 98 per cent leased to 14 tenants.
Some of the occupants have rented space for more than 25 years.
Recently refurbished, Optus Centre is one of only a few buildings in the Civic area to carry a 5-star NABERS energy rating.
It is also the only one to provide modern end-of-trip facilities including showers, lockers and bike storage, the purchaser said.
Centuria’s head of Real Estate and Funds Management, Jason Huljich said strong support from investors and financial advisers in the CDPF has seen the fund’s inflow increase significantly this financial year, allowing the fund to make strategic purchases.
“10 Moore Street is a centrally located property – ideally positioned in Civic, the heart of Canberra’s CBD precinct,” Mr Huljich said. “Public transport to the area is excellent and stage one of the light rail, currently under construction, will provide links further with a terminus only 100 metres from the building”.
“Canberra is Australia’s second fastest growing city (after Melbourne) and this – combined with 10 Moore Street’s central location – was a key factor in our decision to buy.
“The building has been fully regenerated to a very high standard by Quintessential Equity – all the work done over the years has been of a high quality and the actions undertaken to improve the environmental footprint of the building has resulted in a 5-star NABERS energy rating, further enhancing the quality of the acquisition”.
Quintessential provided a rental guarantee on the vacant space, which Centuria “is confident about leasing”.
“One of Centuria’s A-REITs, the Centuria Metropolitan REIT, owns two properties nearby – at 54 and 60 Marcus Clarke Street, about 100 metres from 10 Moore Street – so we are familiar with the area and have had very good leasing success there: we understand what appeals to tenants,” Mr Huljich said.
Russell Bullen, Quintessential Equity’s chief executive officer, described the asset as a “top-tier office investment”.
“Since we acquired the building in 2014, we’ve completed a full regeneration and successful re-leasing campaign at the property, future-proofing it for years to come. There are diverse, high-quality, long-term tenants, strong environmental credentials and an ideal location in an area that will benefit from further investment and significant infrastructure projects.”
At the time Quintessential bought 10 Moore Street, it also settled on a $23 off-market purchase of 14 Moore Street.
CDPF recently acquired a commercial investment in Hamilton, Queensland.
Following its purchase of 10 Moore Street, the fund manages assets worth more than $100 million.
“CPDF is likely to continue to invest in Centuria’s unlisted property trusts, due to their high quality income streams, however, we also intend to make more direct acquisitions, because it gives us more control over the geographical diversity of the trust, and the ability to tilt our portfolio to where we see the most potential,” Mr Huljich said.
“It also means direct property exposure for our investors – with the added benefit that directly-held property improves liquidity and we believe this to be in the best interests of our investors.