AOF Aquire band new A-grade office building in Beenleigh

21 July 2021

Australian Unity Office Fund is pleased to announce the acquisition of a brand new, A-Grade office building at 96 York Street, Beenleigh, Queensland for $33.52 million (excluding acquisition costs), representing a capitalisation rate of 5.75%.

The asset is located in Beenleigh, which is in the heart of Logan, an affordable southeast location in Queensland with significant growth opportunity and improved transportation planned. Beenleigh is one of Logan City Council’s preferred hubs for government services. The commercial centre of Beenleigh has continued to attract A-Grade commercial office tenants, with sustainable income growth expected over the medium to long term.

The asset is located in a government tenant hub, with the Department of Resources, Magistrates Court and Department of Corrective Services all within 600 metres, making the asset ideally located to serve as a long-term home to Logan City Council.

Key asset highlights
  • Total net lettable area of 4,661sqm, 7 levels of commercial accommodation with adaptable floor plates, excellent natural light and a side core to promote an open plan interactive environment
  • 4,009sqm of office space leased to Logan City Council for 10-years with two 5-year options and annual rental increases of the greater of 3.0% or CPI
  • The balance of the asset offers 174sqm of ground level retail space and 478sqm of flexible office space and is covered by a two-year rental guarantee
  • 50 car parks of which 33 are leased to Logan City Council
  • Sustainability initiatives have been imbedded into the building, including solar panels and rainwater harvesting, to deliver a 4.5-star Green Star Design Rating and a 4.5-star NABERS energy rating

The development is a catalyst project for a $40 million economic and jobs boom in Beenleigh and the surrounding area and has been developed by investLogan (a Council funded entity), in partnership with Alder Developments and construction partner Alder Constructions.

investLogan Chair Steve Greenwood said The York was purpose-built to drive economic growth within Logan’s key business centres and the sale of the project signified the next stage in the evolution of Beenleigh.

“Since its inception, The York has been a hugely exciting project for our local community with 100 jobs created during its construction phase with a further 140 full-time jobs created upon its completion,” said Mr Greenwood.

“This project provides a rare fusion of commercial, retail, and residential opportunities and will be instrumental in the revitalisation of the Beenleigh business community by creating a vibrant commercial precinct designed for local business to prosper.

“These incredibly positive outcomes deliver on the vision of investLogan; and reflect the leadership and commitment of its shareholder, Logan City Council, to driving economic growth across the city.”

Alder Developments general manager Greg Tupicoff said the sale of The York cemented Beenleigh as a key commercial hub for the district.

“As an A-grade commercial tower, The York is the first of its kind for Beenleigh and will act as a signpost in the suburb’s growth as a prosperous and well-positioned business hub and commercial landmark between Brisbane and the Gold Coast,” said Mr Tupicoff.

The sale was negotiated by CBRE agents Jack Morrison and Peter Chapple who said with a Government tenant secured for a long-term lease, The York provided a unique investment opportunity for Australian Unity.

The Beenleigh train station is approximately 550 meters south west of the property providing easy connections to Brisbane and the Gold Coast, with a planned upgrade shortly which will add a second rail line enabling express access directly to Brisbane.

The broader Logan area is fast becoming a core metropolitan market that is expected to experience significant population and economic growth over the next 15 years and is forecast to outperform Brisbane, Moreton Bay and Redland Bay as the second fastest growing region in South East Queensland.

AOF Fund Manager, Nikki Panagopoulos, said “The acquisition supports AOF’s refined strategy of owning commercial real estate that aligns with the key asset attributes 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.”

“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”.

The asset will be funded with existing debt facilities and settlement is expected in December 2021.