KM Property Funds, a division of KordaMenta Group, has paid $39.3 million for a contemporary Canberra office following an off-market campaign.
The deal for 1 Thynne Street, Bruce, about a 12 kilometre drive north west of Parliament House, reflects a 6.25 per cent yield.
Purpose built for and fully occupied by Australian Institute of Health and Welfare, the three-storey, 5848 sqm commercial building is six years old.
It covers a 9578 square metre site zoned Mixed Use – giving KM Property Funds flexibility to redevelop once AIHW’s lease expires in June, 2029.
Near Belconnen Town Centre, the Bruce asset is walking distance to University of Canberra.
Completed by local builder BLOC, with S4B Studio as design consultant, 1 Thynne Street has achieve a 5-star NABERS rating.
“There’s been strong interest in this property because all the fundamentals are in place,” Colliers International director, Capital Markets & Investment Services, Matthew Winter, said.
Amongst them, he added, is a lease structured with a three per cent annual rent rise.
Mr Winter found the Melbourne based buyer with colleague Paul Powderly.
Investors seeking stability, secure tenant covenants: agents
“This sale reflects the outstanding opportunity this property presents as well as the fact the Canberra market continues to appeal to investors seeking stability through long-term investments underpinned by secure tenant covenants with attractive pricing metrics,” Mr Winter said.
“We understand that these are volatile and uncertain times, but we are pleased to bring a reliable investment opportunity to investors seeking a high degree of income certainty in their investment portfolio,” KM Property Funds’ co-managing director, Mario Papaleo, said.
“AIHW is an exceptionally important organisation for the Australian community, both in the short and long-term,” he added, noting KM Property Funds aims to invest in properties with high quality tenants.