Irongate Flips Canberra Office to Charter Hall after 30 months

Listed Manger, Irongate group has sold a Canberra Office asset to Charter Hall after just 30 months of ownership.

The Investec Australia Property Fund, managed by Irongate acquired the 4,720sqm, low-rise office building at 24 Wormald Street, Symonston for $29.8m in 2019. The deal at the time reflected a passing yield of 6.9%.

The Commonwealth Government built the communications facility for $36 million and is thought to be a part of the Governments continuity plan, housing back up data and operations equipment. The property is leased by the Commonwealth of Australia until 2027.

Irongate have now exchanged contracts to sell the property to the Charter Hall Direct Fund 4 for $36m, reflecting a passing yield of 6.1% and providing Irongate with a capital gain of 21% over 30 months.

IAP CEO, Graeme Katz, said, “We previously advised the market that we would look to sell properties where we believe valuation creation has been maximised, to protect against downside risk or to improve the overall quality of the portfolio. With 6 years to run on the lease to the Commonwealth of Australia, and strong demand for high quality office properties, we determined that it was an opportune time to consider a sale of the Property. It also provides an
opportunity to rebalance the Fund’s geographical exposure to the ACT following the recent purchase of 38 Sydney Avenue for $73,750,000. The proceeds from the sale of the Property will be used to repay debt which will further strengthen the Fund’s balance sheet and provide additional debt capacity for future acquisitions.”

The sale price is 18% above the current book value of $30,500,000, and 21% above the price paid for the Property in March 2019.

The effective date of the sale is the settlement date under the contract for sale, which is anticipated to be 13 December 2021.