Costa puts big price tag on Geelong building
Geelong-based property investors Costa Asset Management has listed a Ryrie St office complex expected to generate interest above $17 million when it hits the market this week.
The owners have appointed conjunctional agents Colliers’ Jonathon Lumsden, Andrew Lewis, Peter Brember and Ben Baines, alongside Pat Burke of MP Burke Commercial to sell Channels House by expressions of interest, closing May 19.
Costa Asset Management acquired the property at 235 Ryrie St in 2018 with the larger and more modern neighbouring building in a deal worth around $40 million.
The owners embarked on an improvement program, refurbishing the original 1980s building and negotiating with tenants to deliver a fully leased investment to market with a net income of just under $1m a year.
Colliers, Geelong director Andrew Lewis said property has a weighted average lease expiry (WALE) of five years.
“That’s a very good WALE. You wouldn’t normally see that, they would typically by 3.5 years.”
Mr Lewis said CAM had used its extensive investment knowledge to transform the asset.
“It’s been extensively refurbished, with new lists and all that sort of thing, so it’s very much a set and forget building,” he said.
“You tick all the boxes, you get it tidied up, you spend the money and you do that with a property knowledge that a lot of other investors won’t have,” he said
“Costa come with a lot more development knowledge as well, so they get all the bumps ironed out of it, put it back out on the market, making it a lot easier for the next buyer.”
The work puts the building into different bracket based on the quantum of price.
“Now we’re talking high teens – $17m – so it’s a high wealth individual or syndicate of superannuation.
“The thing is, it’s a good property, it will look after itself.
“I think they’ll buy it, put it in their bottom drawer and not worry about it and get a nice income from it going forward.”
Mr Burke said the work done on the leasing front had set the property up for the next owners.
The centrally located three-level building has a net lettable area 2622sq m plus a single level of secure basement parking.
“Once refurbished and having secured leading accounting firm Findex on a new 10-year lease this is now the right asset, in the right market for investors seeking a solid, high performing investment,” Mr Burke said.
In addition to the Findex lease, a new lease has been signed with Nucleus Network Australia’s largest Phase 1 clinical research company, while long term tenants Clinical Laboratories and Coulter Legal have extended their leases over the past two years.