Fund managers trade Brisbane riverfront office
EXCLUSIVE
Centuria is selling Exceed Capital a fully leased office with development upside on the banks of the Brisbane River, at Toowong.
The off-market deal for 555 Coronation Drive is speculated to be worth over $30 million – less than the December, 2023, book value of $36m which assumed a 7.5 per cent capitalisation rate.
Developed in 1989 and renovated four years ago, it is fully leased; key tenants are Panthera Finance, which occupies 36pc, and Data #3, leasing 40pc and branding rights.
With 5568 square metres of 5.5-star NABERs rated space it also contains 175 car parks over 2.5 floors.
The office is renowned in leasing circles for its large (c2000 sqm) floorplates and water views; the weighted average lease expiry by income is 3.2 years.
On 3104 sqm opposite the Toowong CityCat terminal, surrounded by major buildings, it has significant development upside after that – up to 10 floors could be considered given the zoning.
Toowong is three kilometres south west of the CBD (story continues below).
Trading between funds
Centuria paid Sentinel Property Group $33.4m for the Toowong office in 2014, holding it in the Office REIT (COF).
The Exceed fund it is earmarked for – the TO Property Trust – currently seeking backers, is expected to pay eight per cent annual returns monthly.
Income will be derived from rent and capital uplift; the yearly internal rate of return is projected at 18pc.
The Brisbane based buyer describes the investment as counter-cyclical being bought at “well below replacement cost and…book value”.
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