Government leased property Sold for $11.6m

A longstanding government building in Sale has been sold for $11.6M and a razor sharp 5.4% for regional Victoria, after almost 30 years of tenure with both the State and Federal Government.

Stonebridge Property Group’s Rorey James, Kevin Tong and Justin Dowers handled the Public Expression of Interest campaign, signalling that the result far exceeded all expectations and confirmed the strategic timing to offer the asset.

The property was sold to an international Chinese investor, the second time this has happened this year, after the Spotlight building sold earlier this year to a buyer from the same origin, also sold by Stonebridge.

Leased the Department of Health and Human Services (DHHS) and Services Australia (Centrelink), the property was sold with a short WALE of 3.6 years, further highlighting the result achieved.

Despite the past 2 regional Victorian Centrelink’s trading for yields of 7.74% (Ararat) and 8.77% (Hamilton), the yield achieved for Sale was more than 200 basis points sharper at 5.45%, with the shorter WALE and higher price point not deterring investors chasing a secure income stream, according to Stonebridge.

“With a continued flight to quality from buyers towards safe haven investments, the ‘Gov Hub’ building received strong attention from local, interstate and some international markets, evidenced by the eventual sale price and the numerous underbidders who missed out on the opportunity.”

Leading fund manager Castlerock has been acting on behalf of the vendor, with Castlerock CEO Hank Bronts saying, “We are thrilled to have achieved such a strong result for local investors.”

Regional Victoria continues to be sought after by investors looking to capitalise on the 50% stamp duty concessions together with the growth coming from these core regional hubs, with Stonebridge having sold more than $150m of regional investments in 2021 alone from 19 transactions.

Bookmark
close

Sign up to receive our FREE
Weekly Insights Newsletter.

We don’t spam! Read our privacy policy for more info.

About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

Check Also

10 Sustainability Initiatives in Property

We are keen to support Sustainability initiatives in the property sector and with a myriad of acronyms, organisations and options, we thought it would be useful to maintain a register of go to resources for organisations to make better decisions about sustainability.

Intro: Urban Innovation & Foresight

Welcome to our Urban Innovation & Foresight series, where we will unpack a range of forces which will shape the way we use our urban areas over the next decade.

Derrimut deals sets new records for industrial

A private investor has snapped up a state-of-the-art distribution centre in Melbourne’s west pre-campaign for more than $20million as competition for industrial and logistics assets across the state continues to heat up.

Leave a Reply