One of Australia’s largest unlisted property fund managers ISPT is preparing to sell two Victorian police station assets amid rising demand for long-leased social service and infrastructure properties.
CBRE Capital Markets – Office agents Tom Ryan and Scott Orchard, together with Sandro Peluso and Jimmy Tat of CBRE’s Social Infrastructure team, have been appointed to steer the Expressions of Interest campaign.
The properties are 100% leased to Victoria Police as longstanding occupiers of the 1-7 Coventry Street, Narre Warren and 151 Centenary Drive, Mill Park assets.
ISPT fund manager Georgina Bishop said a rebalancing of ISPT’s CIB Fund, which controls a portfolio of Victorian law courts and police stations, had spurred the sale campaign.
“The strong performance of the fund and some recent acquisitions have prompted the decision to sell the Narre Warren and Mill Park assets, which have been identified as highly appealing given their tenancy covenants and future potential,” Ms Bishop said.
The Narre Warren and Mill Park properties are predominantly office buildings for administration and dispatch purposes. They have building areas of 2,099sqm and 2,123sqm respectively, including meeting rooms, public reception areas and some on-site holding cells.
CBRE’s Mr Ryan said the Victorian State Government leases, extensive landholdings and improvements would be key buyer drawcards.
“Police station freeholds are seldom offered for sale, with the campaign also coinciding with increased buyer demand for robust tenant profiles in the wake of the pandemic,” Mr Ryan said.
“Both assets house unique infrastructure and improvements and have benefitted from recent building upgrades.”
The properties offer current lease terms until December 2025 with no further options. Narre Warren, occupies a corner site of 3,619sm and offers a net annual income of $615,688, while Mill Park occupies a 6,173sqm landholding and offers a net annual income of $648,654.
Mr Peluso noted, “Both properties are supported by a wide variety of retail amenity and services given their proximity to major shopping centre destinations in Westfield Fountain Gate and Westfield Plenty Valley. There has been an investor gravitation towards social service and social infrastructure properties in recent years as investors seek to strengthen the ESG credentials of their portfolios, with the replacement costs and future possibilities of each asset making the investment case very compelling.”
The Expressions of Interest campaign closes Wednesday 22nd June at 12noon, with pricing expectations of circa $10,000,000 for each property.