Hans Ehmann buys CBD office
Local developer Hans Ehmann, part of the family which holds car and caravan dealerships, fleet management and leasing, and smash repair businesses, has paid $13 million for a three level office with development upside in the city’s north east.
The result 99 Frome Street reflects a 6.43 per cent passing yield; 21 pc of the 3432 square metres of lettable area is vacant.
Based on the potential fully let income (c$1.15m) the return rises to 8.9pc.
Colliers’ Alistair Mackie, Rhys Newman and Paul van Reesema brokered the deal.
Being in South Australia, the commercial property sale will not incur stamp duty.
99 Frome Street
Six offers came in for the A-grade Frome St office following an expressions of interest campaign which closed in March.
“It was a highly competitive campaign with over 85 enquiries…clearly indicating a strong appetite for opportunities in the sub $20m sector with value-add potential,” Mr Mackie said (story continues below).
“As the flight to quality continues for office space in Adelaide’s CBD, vacancy rates keep tightening for high quality, A-grade offices, with 78pc of the deals being attributed to businesses expanding or upgrading, a trend that is expected to continue during the second half of 2023” he added.
O’Loughlin’s Lawyers and ElectraNet are the anchor tenants at 99 Frome St.
The vacancy affects a ground floor tenancy.
With a 4-star NABERs rating, the asset also includes 56 basement car parks.
“The property will enjoy the increased activity and demand through the eastern precinct and is well located to capitalise on the [anticipated] overflow of tenant requirements,” Mr Newman said.
Elsewhere in the immediate area, Renewal SA is replacing the former Royal Adelaide Hospital with a high-tech focused precinct, Lot Fourteen.
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