The City of Gold Coast has bought a modern 12 level Bundall office for its investment portfolio.
On 4161 square metres, 1 Corporate Court is costing $46.25 million – a seven per cent net passing yield.
RF Corval was the vendor; the asset forms part of the 2.76 hectare Wyndham Corporate Centre it picked up from Cromwell for $89m in 2017.
The fund manager said the part sell-down was always part of its plan; it will retain the balance of the park – a 16 storey office, 2 Corporate Ct and a low rise commercial building.
On a prime site between the Nerang River and Southport Golf Course, the holding also includes a large open air car park offering significant development upside.
Bundall is just over a kilometre south west of Surfers Paradise.
Office hot spot
Raptis developed the Wyndham Corporate Centre as the Bundall Corporate Centre in the late 1990s.
One Corporate Ct was constructed in 2009 by then-owner Trident Corporation.
With 7931 sqm – 93.7pc of which is occupied – the weighted average lease expiry is 5.3 years.
Florida based time share giant Wyndham Destinations has been the anchor, with naming rights, since 2011, renting c25pc.
IBM Australia and financial services group Aspire 32 are other major occupiers.
If fully let, the asset could return $3.54m per annum net – increasing the yield to 7.65pc (story continues below).
The council is a good bet to achieve that – with Bundall (and the Gold Coast) having one of the country’s lowest office vacancy rates – 4.7pc, according to the Property Council of Australia’s January, 2023, Office Market Report, down from 7.2pc two years ago.
Incentives have also been reducing recently, boosting real rents, according to the selling agents, CBRE’s Mark Witheriff, Jack Morrison and Peter Chapple with McVay Real Estate’s Dan McVay and Brock McDermott.
“This sale is in line with the original strategy to break down the investment lot size of the entire corporate centre and sees a substantial amount of the original capital returned to investors,” RF CorVal’s head of Transactions, Oliver Picone, said.
“We are pleased to retain the corporate centre one building that continues to provide exposure to the strong performing Gold Coast market,” he added.
Council boosts portfolio
The Bundall deal comes six months since council outlaid $20.95 million for adjoining Carrara sites – all up covering 5.1ha – on which it is planning a water and sewerage plant.
Four years ago, it bought 85ha at Yatala for $12.8m to build sports and recreation fields.
Offered by the Enkelmann family for the first time since the 1800s – the council outbid industrial developers for that block.
The City of Brisbane Investment Corporation, meanwhile, last March paid Molonglo $71m for a Canberra office, 33 Allara St.
That group has also been an active seller – including in 2021 when it divested the city’s historic Gordon & Gotch building for $18.8m – more than twice the $9.14m it paid four years earlier before renovating.
Late last year CIBC also listed a Parramatta office – 9 George St – which it bought for $44m in May, 2019.
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