Canberra’s bumper year paves way for office tower sale
A seven-year high for Canberra commercial property has prompted the sale of a prominent Hume Partners Property-owned CBD office tower.
The property investment group has put one of Canberra’s most well-known buildings, 73 Northbourne Avenue, on the market in a bid to take advantage of the renewed interest in Australia’s capital city.
CBRE and JLL have been appointed to sell the full leasehold interest in the property, which is home to a number of major tenants including the Australian Fisheries Management Authority, self-managed super fund group Dixon Advisory, Bankwest, Technology One and FEI Australia.
The seven-storey building was significantly refurbished in both 2007 and 2015 and has 6112sqm of lettable space as well as two levels of basement car parking, while the leasehold has another 69 years to run, with the statutory right to take up another term.
Hume Property Partners managing director Scott Davies says his company had elected to move the building on after witnessing an investment surge in Canberra throughout 2015.
Astute investors are viewing Canberra as a classic ‘counter cyclical play’ at a time when commercial leasing conditions are strengthening
“We identified that 73 Northbourne Avenue would be an attractive proposition for purchasers in light of the current market conditions, whereby it’s becoming increasingly difficult to secure investment grade assets in Sydney, Melbourne and Brisbane,” Davies says.
“Sustained appetite and competition is expected for assets in Canberra over 2016 due to the shortage of investment grade assets on the eastern seaboard.”
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Canberra enjoyed a bumper 2015, with $435 million in office assets changing hands – the most since 2009.
Two major deals underpinned the record result: the $225 million sale of the Louisa Lawson building and the Juilliard Group’s $75 million purchase of a group of government-leased office buildings in Tuggeranong.
CBRE’s Canberra managing director Andrew Stewart, who is marketing 73 Northbourne Avenue with Scott Gray-Spencer and JLL’s Michael Heather and Rob Anderson, says Canberra’s potential for higher yields would be a key attraction for investors.
“Astute investors are viewing Canberra as a classic ‘counter cyclical play’ at a time when commercial leasing conditions are strengthening, particularly in the A-grade sector,” Stewart says.
The building is to be sold through an expressions of interest campaign, which ends on March 11.