Forza makes $65.5m Brisbane investment
Property funds manager Forza Capital has finalised a deal to buy a South Brisbane office tower from Armada Funds Management for $65.5 million in a sign that groups are making counter-cyclical investments in the city.
The deal will see Forza buy on an initial yield of 7.88%, reflecting the spread available on secondary properties in Brisbane when the margin to higher grade properties has shrunk in Sydney and Melbourne.
The building at 10 Browning St was completed in 2008 and spans four levels of A-Grade office space, as well as ground floor retail, with a total net leaseable area of 11,214sqm.
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Armada bought the office block for about $55 million in 2011 from a portfolio associated with the directors of the WOW Sight & Sound Superstores. Some additional development land that was acquired was also sold to developer Galileo for its Arena Apartments project.
This transaction reinforces the demand for new generation assets with secure and diverse cash flow
CBRE’s Bruce Baker, Flint Davidson and Tom Phipps brokered the sale.
“This transaction reinforces the demand for new generation assets with secure and diverse cash flow,” Phipps says.
Davidson says stock remains tight around the country, but Brisbane continues to provide opportunities to acquire modern well let assets.
The building has a weighted average lease to expiry of 5.19 years and is underpinned by a 380 bay carpark.
It is 95.37% occupied with the Melbourne Hotel, Visionstream and Credit Corp as major tenants. Long-term debt funding for the acquisition was originated by Matt Lawrence of CBRE Capital Advisors.
