Pellicano and Camlen Property Group sell unbuilt Ringwood office for $28.3 million
Pellicano and Camlen Property Group have sold an office investment they are yet to build in Ringwood.
A Macau-based private investor is buying 60-62 Maroondah Highway (artist’s impression, top) for $28.3 million.
Upon completion in about May, 2020, the five-storey complex, with 3325 square metres of area, and 74 undercover car parks, will be fully leased to the Victorian government, which signed a 12-year pre-commitment with the vendors.
Based on the annual rent the government is paying, the deal is being struck on an initial 5.3 per cent yield.
The site, spreading about 850 square metres, currently comprises two single-level retail buildings.
Factoring in the office development proposal, the sale price reflects a building rate of more than $8500 per square metre, the marketing agents said.
CBRE’s Kiran Pillai, Josh Rutman and Lewis Tong with Dawkins Occhiuto’s Andrew Dawkins and Walter Occhiuto represented the vendors.
Renato Pellicano of Pellicano Group said “it has been fantastic working with the government on fulfilling their accommodation needs and we are very excited to deliver another quality project for them”.
Jamus Campbell of Camlen Property Group added “Pellicano has been a great joint venture partner to work with. It is very pleasing to see 24-months work come to fruition and we hope to continue working with the government to deliver additional buildings in coming years”.
Mr Rutman said the result was “a clear demonstration of the appetite for suburban office investments in Melbourne”.
“Buyers are focusing on tenancy covenants and lease tenure and have demonstrated a willingness to push pricing to new heights to secure the right opportunities,” the agent said.
“We expect to see similar take-out or fund through deals in 2019 as suburban tenants continue to pre-commit to new buildings ahead of existing lease expiries to provide their staff with customised office accommodation.”
The agents said the Ringwood campaign generated nine bids from domestic and international investors. Four groups contested in a second round, resulting in an unconditional sale agreement.
Lewis Tong, National Director of CBRE’s Asian Services Desk, said the bidding highlighted a continued shift in focus by Asian capital domiciled in Australia from residential development projects to commercial investment deals.
“Capital is recalibrating as the market changes and we expect the interest in office investment opportunities to continue well into 2019, particularly after Chinese New Year,” Mr Tong added.
Andrew Dawkins of Dawkins Occhiuto said the project’s location in Ringwood – one of only nine Metropolitan Activity Centres in Melbourne – had been an investor drawcard.
“The Ringwood activity centre has experienced significant change over the past two years, with exponential population growth spurring investment by organisations such as Costco and QIC,” Mr Dawkins said.
“The sale result sets a new benchmark for a long WALE asset in suburban Melbourne, surpassing the 5.4% yield set by Cedar Woods for 107 Overton Road at Williams Landing [another office which sold prior to completion].”
The office at 60-62 Maroondah Highway, Ringwood, is targeted for a five-star NABERS energy rating
In September, we reported that an 8067 square metre site comprising several retail and office buildings, at 154-166 Maroondah Highway, Ringwood, sold for about $11 million to local private investors.
