Property investment fund manager Clarence Property has settled on its second acquisition inside a month, adding a total $22.7 million to its unlisted Westlawn Property Trust portfolio.
Clarence has secured 201 Leichhardt Street Spring Hill – a blue chip commercial precinct for $14.272 million, after purchasing an industrial complex in Northgate for $8.475 million in recent weeks.
Both Brisbane assets boast long term leases to high level tenants, with the Spring Hill office anchored by entertainment and events network, Ticketek, alongside ERM, Integral and Ipsos.
The Northgate industrial hub is home to Provet, Australia’s leading veterinary distributor and subsidiary of Henry Schein, a Fortune 300 company and one of the world’s largest providers of health care products.
Clarence Property managing director Peter Fahey says Leichhardt Street is a ‘good fit’ for the group’s portfolio, which comprises an array of A Grade commercial assets throughout South East Queensland.
Mr Fahey says the Leichhardt Street acquisition signals Clarence’s return to the Brisbane commercial property market, following the sale of its 307 Queen Street tower in late 2013 for $120.8 million.
“We see value in the Brisbane market and we anticipate it will continue to strengthen over the coming years,” he said.
“As a rule we look for assets that are anchored by quality tenants and provide scope for growth or improvement.
“The Leichhardt Street property is appealing as it has recently undergone a substantial refurbishment with no capital outlay required, is located close to the CBD and was bought on a yield above eight per cent which supports Westlawn Property Trust’s current distribution. ”
201 Leichhardt Street was sold by Cornerstone Properties, with the deal negotiated by Colliers International in conjunction with Knight Frank.
Knight Frank Managing Director Ben McGrath says Clarence Property secured the Spring Hill asset at a perfect time, following the recent approval of the much awaited Spring Hill Neighbourhood Plan.
“There was a significant amount of interest in this asset, partly due to the location and future development upside associated with the revised Neighbourhood Plan, but also due to the limited opportunities that exist in the sub $20 million Brisbane CBD and near city office market,” he said
“The high quality of the refurbishment completed by Cornerstone Properties was also a reason for the large amount of interest in this asset.”
Jason Lynch, National Director of Capital Markets at Colliers International, who introduced the asset to Clarence Property said:
“Considering we are in the midst of an improving leasing market in Brisbane, we anticipate the net effective rents to follow suit, so the 2.6 year WALE in combination with limited CAPEX risk was what made this asset an attractive investment for Clarence Property. The campaign also attracted local and interstate private investors, syndicators and fund managers.”
Source: Clarence Property