The North Geelong property owner-occupied by Target as its headquarters for more than 40 years, until 14 months ago, has been rented to not-for-profit agency, Gateways Support Services.
Teska Carson and Colliers International brokered the 10-year deal for 11,108 sqm of office space.
It is understood the occupier, an autism support specialist, is paying about $200 per square metre, per annum, net (or about $2.2 million annually).
Leaf Corporation paid Wesfarmers $10.6 million for the 3.8 hectare site at 12-14 Thompsons Road – near the trough in the last local property cycle.
It immediately announced its intention to replace the 13,233 sqm office as part of a residential redevelopment.
But with Gateways offering the landlord a potential 21 per cent net yield, Leaf Corp, not surprisingly, changed direction.
Geelong, about 75 kilometres south west of the Melbourne CBD, is undergoing a building wave, including of factories formerly owner-occupied for decades by Ford.
Last December, a twice-daily ferry service connecting the region to Docklands was launched.
Leaf Corp pleased with its 21pc yielding investment
Director Adam Rogers said he was pleased with the 12-14 Thompsons Road deal.
“This is a great result for Leaf Corp but it is a much greater result for the Geelong community and particularly for those people and their families who rely on the much-needed services that Gateways provides,” the executive said.
The deal leaves the landlord with about 2125 sqm of office area to let, and a much more valuable asset to sell.
Last November we reported Leaf Corp spent $3.4 million on a 9275 sqm parcel of land at 6 Thompsons Road, abutting the ex-Target HQ.
At the time we speculated its newest block – offering unobstructed views over Geelong Golf Course – could be incorporated into its office site redevelopment.
That could still be the case if #6 is amalgamated with part of the ex-Target office’s enormous car park (see image, below) which might not have formed part of the Gateways lease.
Right time, right place, for Geelong-based Gateways
Teska Carson’s Steven Fein said Gateways had been in the market for an office to expand its service provision department.
The support service group was established in Geelong 20 years ago.
Its new headquarters is about 4.5 kilometres from the Geelong CBD.
“The former Target site is in a great location with excellent access and offers a flexible layout which will lend itself to the expanded program that Gateway is looking to provide,” Mr Fein said.
About 200 staff will be based at 12-14 Thompsons Road, which will be configured with a gymnasium, café, community garden, hospitality and state of the art therapy and recreation facilities.
Gateways intends to use part of the office for life skill and job-ready training.
Target, meanwhile, which accommodated more than 900 staff at North Geelong, is enjoying its first year at an A-grade Williams Landing headquarters in Tarneit, about 23 kilometres west of Melbourne.