Perth investors have paid $9.5 million for a 20 year old Gold Coast office.
The five-storey building at 128 Bundall Road, Bundall, was sold by Newallah Pty Ltd, an entity linked to the Hams family.
Newallah offered the investment with a rental guarantee covering a four per cent vacant component.
The deal is being struck, therefore, on a fully let 8.15 per cent market yield.
With 2984 square metres of area and 66 car parks, the office is about a five minute drive to Surfers Paradise, Southport, Broadbeach and Ashmore.
Major occupiers, including Walker, RSL Queensland, Patersons and Wahlstron Financial Services, the latter which has naming rights, contribute to the passing annual income of $770,000.
The Bundall deal comes five months after the same brokers represented Newallah selling a 2533 square metre office at 7-11 Short Street, Southport, for $8.2 million off-market.
“The sale of 128 Bundall Road is an incredible run for the street,” Mr King said.
“In fact, three adjoining office buildings have now sold for a combined value of $35 million in just over two years.
“The lack of opportunities currently in the market and the value this building presented led to the expressions of interest campaign generating 89 enquiries from a mix of domestic and interstate investors.
“We received six offers, with the highest one coming from an interstate investor,” the broker said, adding of the Bundall property “prices are substantially higher in other states so they are willing to compete with locals on price”.
Mr Crawford said that with the cost of debt at record lows, “yields have continued to compress in the capital cities resulting in buyers looking further afield for stronger returns”.
“As Australia’s sixth largest city, Gold Coast offers investors strong property fundamentals, limited new supply and yields ranging between 7 and 8 per cent.
“The outlook for 2020 is a positive one with transaction volumes expected to be up in the first half, and yield compression is likely as buyers compete for secure returns”.
The purchaser of 128 Bundall Road, according to Gold Coast Bulletin, is Sandy and Gus MacKellar and Chris Glass, who own Perth-based syndicate Property Bank Australia.