LaSalle Investment Management have sold the ATO building in Mount Gravatt to Charter Hall for $63.6m following an on market campaign.
The purpose-built A-Grade asset is fully leased to the ATO with a WALE of 7.5 years. The property will provide Charter Hall Long WALE Reit with a net passing yield of 7.7% and fixed 2.5% annual rental reviews.
LaSalle acquired the asset in January 2016 for $57m. The asset sits on a larger 1.2ha site with ample room for further development. In July 2017, La Salle submitted a DA on the site for 2 new residential towers designed by Nettleton Tribe.
The two towers (one 12 storeys and one 14 storeys) were positioned between the ATO building and the adjacent Westfield Shopping Centre and provided 203 apartments. Council finally approved a scheme in March 2019 containing 179 units with Building A at 15 storeys and Building B at 11 storeys.
Given the downturn in the residential market it is unlikely that Charter Hall will develop the residential apartments, however with an approved subdivision in place, Charter Hall could consider sell off the 3,257sqm site at any stage.
The property was sold by JLL.