- Australian Unity Office Fund (AOF) acquires an A-grade office facility in Queensland with a 10-year local government lease for $33.52 million
- Existing debt facilities will be used to raise the funding, with the purchase price representing a capitalisation rate of 5.75 per cent
- The building is anchored by 4009 sqm of office space leased to Logan City Council for 10-years with two five-year options and annual rental increases
- Australian Unity Office Fund shares are up 0.86 per cent, trading at $2.35 at 11:40 am AEST
Australian Unity Office Fund (AOF) has purchased an A-grade office building in Queensland with a 10-year local government lease for $33.52 million.
The office building at 96 York Street, Beenleigh has a total net lettable area of 4661sqm spread across seven levels of commercial space with adaptable floor plates.
Existing debt facilities will be used to raise the funding, with the purchase price representing a capitalisation rate of 5.75 per cent.
The building is anchored by 4009sqm of office space leased to Logan City Council for 10-years with two five-year options and annual rental increases of the greater of three per cent or CPI.
The remaining portion of the asset, which includes 174 square metres of ground-floor retail space and 478 square metres of flexible office space, is protected by a two-year rental guarantee.
CBRE’s Jack Morrison and Peter Chapple negotiated the deal of the brand-new building, with the project recently topping out.
The asset is in the midst of a government tenant hub, with the Department of Resources, Magistrates Court, and Department of Corrective Services all within 600 metres, which AOF said makes it perfect for Logan City Council to call home for the long term.
AOF fund manager Nikki Panagopoulos said the acquisition supports the company’s growth strategy of acquiring real estate that aligns with key asset attributions of affordability, accessibility and amenity.
“In undertaking this acquisition, we have been able to recycle capital from the sale of 241 Adelaide Street, Brisbane, an ageing leasehold asset requiring significant capital expenditure into 96 York Street, Beenleigh, a brand new purpose-built freehold building that provides long term income certainty with minimal capital expenditure requirements and sustainable initiatives,” she said.
“Management will continue to execute on its active asset management strategies, including refurbishments and developments while assessing further capital recycling opportunities.
“These opportunities will be investigated in parallel with the assessment of the proposed merger with the Australian Unity Diversified Property Fund.”
Settlement of the building is expected in December.
Australian Unity Office Fund shares are up 0.86 per cent, trading at $2.35 at 11:40 am AEST.