GDI has exchanged contracts to sell 50 Cavill Avenue, Surfers Paradise, for $113.5 million.
The 16,625sqm B Grade asset was marketed for sale by CBRE back in 2019 but interrupted by COVID.
The property provides 22 levels of office space with leases in place to Mantra Group, Nine Network Australia, PWC, Bell Potter, Regus & CBRE and is expected to generate a fully leased net income of $7.6m. Based on the sale price of $113.5m, the property is providing the purchaser with a potential fully leased yield of 6.7%.
GDI purchased 50 Cavill Avenue, Surfers Paradise, in February 2016 for $48.75 million (approximately $46.1 million net of adjustments). At the time of acquisition, the Property was approximately 54% occupied with no NABERs Energy rating.
Following an extensive refurbishment and releasing programme, the property is now approximately 97% occupied and has a 4.5 Star NABERs Energy rating.
After selling costs and other settlement adjustments, GDI anticipates netting approximately $109.0 million from the sale, an $8.0 million premium to the 30 June 2020 carrying value of $101.0 million. Settlement of the sale is anticipated to occur on or around 31 August 2021.
Managing Director of GDI, Mr Steve Gillard, stated that this is a prime example of what GDI does really well. “We realised that 50 Cavill Avenue could be the preeminent business address on the Gold Coast. We identified opportunities for capital expenditure to improve the asset’s appeal, reduce its operating costs and improve its environmental performance. We were confident that if we did this the occupier market would follow, and we are very pleased with our successes on all these facets” Mr Gillard stated.
GDI will use the proceeds from the sale to repay its existing loan facilities. Following repayment, GDI will have only approximately $60.0 million of drawn debt on its Principal Facility, giving GDI the financial flexibility to continue both its asset and capital management initiatives.