Forza Capital has paid $41 million for a B-grade Brisbane office with plans for an uber-green overhaul.
The asset, 200 Creek Street, was offloaded by Sentinel which acquired it five years ago from Centuria after a $2.7m upgrade.
On 6211 square metres also at the south east corner of Astor Terrace and Cousins St, the 10 level building is walking distance to Central train station.
About two thirds of the 7606 sqm of lettable area is tenanted to groups including Persolkelly, Ramsay Health Care and South East Queensland Water.
“The asset really appealed to us and we believe there was a unique opportunity to reposition the building into a high quality CBD fringe offering,” Forza director Ashley Wain said.
An upgrade to services and its façade, as well as the addition of end-of-trip facilities is planned.
The purchase comes 13 months since Forza paid Mirvac $86.8m – a deal which reflected a high 7.5 per cent fully let yield – for the Oracle building at nearby 340 Adelaide St.
Greening buildings not difficult or costly: Forza
The Creek Street property will be majority funded by a $30m Clean Energy Finance Corporation loan; Forza has additionally raised $27m from its pool of high net worth investors.
The refurbishment is expected to cost more than $9.5m.
Upon completion, the 25 year old asset’s emissions should be cut 55pc – creating an energy standard better than a new property.
A 5.5 star NABERS rating – a performance level achieved by just six pc of Australian commercial structures – is anticipated.
Forza director Adam Murchie said the transition to mid-tier buildings to a lower carbon future is not particularly difficult or costly.
“More importantly, in our experience, one such assets are transitioned we find they actually create additional financial returns through cost savings and valuation improvements,” he added (story continues below).
According to the CEFC joint head of property, Michael Di Russo, buildings are responsible for about a quarter of Australia’s greenhouse gas emissions and represent one of the most cost-effective opportunities to cut emissions.
“A significant portion of buildings anticipated to be standing in 2050 have already been built,” he said.
“Energy efficient buildings place less stress on the electricity network, lower electricity consumption and improvement resilience outcomes for businesses”.
They are also increasingly attractive to tenants, he added.
CEFC on board
The Creek St property will undergo equipment and building services upgrades, including a combination of energy efficiency, renewable energy and energy conservation technologies and practices, according to CEFC.
“Refurbishment upgrades to improve sustainability include installing energy efficient heating, ventilation and air conditioning, as well as solar panels and battery storage,” it added.
“Other improvements include lift and building management systems upgrades, façade thermal imaging improvement and a dedicated end-of-trip facility, enhancing the overall amenity,” according to the group.
“The improvements are expected to deliver a…reduction in emissions, leading to the direct abatement of 415 tCO-2 (total carbon dioxide equivalent) annually and 7128 tCO-2 over the lifetime of the building”.
CEFC chief executive officer Ian Learmonth said refurbishing existing commercial buildings will have “a powerful impact” on the emissions and livability of our cities.
“Refurbishing buildings is an innovative way to think about how we can achieve net zero emissions,” he added.
“We’re looking forward to working with an experienced operator such as Forza to demonstrate the potential to make our cities and work places more sustainable”.
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