Hamilton office leased to two governments sells for $6.75 million

Williamstown’s Stag Hotel was supposed to have been auctioned with the Hamilton office. Instead it traded following a private treaty campaign, for $2 million.

An office leased to the Morrison and Andrews governments in Victoria’s regional Hamilton sold for $6.75 million on Thursday.

When the investment at 258-264 Gray Street was listed five weeks ago, it formed part of Burgess Rawson’s 135th monthly auction event which was scheduled to happen on Wednesday, April 1 in Sydney then Melbourne.

Instead, like all properties in that portfolio, the campaign was converted to private sale treaty following social distancing measuring to curb the COVID-19 spread.

The Shepparton office occupied by ASX-listed PSC Insurance’s Griffiths Goodall sold late last month for $4 million.

Ben Coulter and Raoul Holderhead with Hamilton-based LMB Linke’s Graeme Linke brokered the deal on an 8.8 per cent yield.

Burgess Rawson said that to date it has sold $32.665 million worth of stock which was to have been put up for public sale.

This includes Williamstown’s 130 year old Stags Head Hotel at 39 Cecil Street (pictured above, right) trading for $2 million on a 4.1 per cent yield and Shepparton’s swank 20-24 Welsford Road office (image, right), tenanted to ASX-listed PSC Insurance for $4 million – a 6.37 per cent return.

Ballarat late night venue The Bluestone, however, hasn’t sold

The historic three storey, renovated building returns annual rent of $320,000 on a lease which, with options, could see the occupier stay until 2044.

Late last month we reported about another two deals from Portfolio 135: a Rosebud petrol station which fetched $7.6 million and a Tarneit childcare centre, trading for $5.45 million.

Centrelink Hamilton

The agents marketing 258-264 Gray Street said the investment offered a 10-year lease to both the federal government (for Centrelink) as well as one to the Andrews administration (Department of Health and Human Services).

It is fully leased, returning $591,961 (ex-GST) annually – with fixed yearly rent rises (4 per cent for the Liberals, 3 per cent for ALP).

Constructed in 2012/2013, and partly updated since, the incoming owner will also be able to claim depreciation (taxation) benefits.

The 1370 square metre office sits on a 2987 square metre parcel also configured with 41 car parks (12 undercover), accessed from Sedgewick Street.

In central Hamilton, the land is zoned Commercial 1, meaning it could be replaced with a mixed-use project containing residential.

The property is within an important commercial centre with a trade catchment of more than 30,000, the marketing agents said.

The Hamilton office sits on a 2987 square metre battle-axed shaped block at the centre of town.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.