Campbelltown Offices trade at 10% yield30 August 2019
Property investors in search of higher yields have been attracted to Campbelltown with a Queen Street office building trading at a 10% yield at $19.3M.
The property at 171 Queen Street comprised a 2 Star NABERS rated C Grade building built in 1986. The 8 level building provides 7,371sqm of NLA of which 94% was leased to with a WALE of 2.39 yrs and a passing net income of $1.773M.
The average rental rate for office space in the building is $310/sqm gross ($215 net). As a result of the recent upgrade works and lack of quality office space in the local area, CBRE estimated the current market rate for this building is approx $350/sqm gross, which would be competitive relative to equivalent premises in neighboring office markets like Liverpool which are achieving $430/sqm gross.
An increase to $350/sqm across the building would see the yield increase to circa 12%pa.
The property was marketed by CBRE early last year and exchanged in April 2019 with settlement completed in August 2019.