Underutilised city office trades on 1.6pc yield

The site (marked) is surrounded by several major towers.

A low-rise office with significant development upside near the State Library has sold for c$12.9 million.

The deal for 152-156 Little Lonsdale Street, believed to be with a group of local builders to which the asset passed into at auction earlier this month, reflects a c1.59 per cent net passing yield.

It also values every square metre of the (404 sqm) Capital City 1 zoned block, on the north west corner of Davisons Place, at $31,900.

Colliers’ Daniel Wolman, Oliver Hay, Leon Ma and Matthew Stagg with Allard & Shelton’s Joseph Walton, Christian Hatzis, Patrick Barnes and Michael Ryan represented the vendors, private investors, who have held since the mid-1970s.

Development hotspot

Containing 822 sqm over three floors, 152 Little Lonsdale St, as the building is known, is fully leased, with three tenants each getting two car parks (story continues below).

The Little Lonsdale Street office returns annual net rent of c$205,072.

The site is in a development hotspot, opposite a 20 level, c12,000 sqm mixed-use commercial tower Perri Projects and Pellicano is completing at 11-21 Bennetts Lane.

In the immediate pocket too, Iglu is constructing a 28 storey, 374-room student accommodation complex at 274-276 Russell St – due to open next year.

The address is also near Charter Hall’s c$1.5 billion multi-building Wesley Place, which contains two new offices, 140 Lonsdale St, of 20 floors, and 130 Lonsdale (35 levels).

A block away, SP Setia is completing the landmark Sapphire by the Gardens complex, with two towers, of 60 and 62 storeys, containing 445 apartments and a 500-room Shangri-La backed hotel, which recently hit the market for sale, via Colliers’ Gus Moors, with a c$500m price guide.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.