Boutique Fund Manager, Stirling will acquire a commercial asset and an undeveloped car park in Liverpool for $46m.
The 8 storey B Grade commercial building in Northumberland St provides 7,284sqm of net lettable area of which approx 980sqm is currently vacant.
The vendor, Scenic NSW will provide a 6 month rental guarantee over the vacant tenancies. Existing tenants include: CBA, Westpac, Catholic Healthcare, The Benevolent Society and Brydens Lawyers.
Stirling report that the current passing rental in the building is approximately 13% below Grade B market rents and 60% below Grade A market rents, providing them scope to lift the rental profile of the building which has a weighted average lease expiry of 3.5 years.
The office component of the transaction reflects an equivalent yield of 6.7% if fully leased at market. The Bathurst Street development site covers 1,334sqm and is currently used for on-grade car parking for 57 vehicles.
A Development Application has been lodged for 66 apartments and 2,508 sqm of commercial use. Stirling expect to sell the development site once the DA is approved.
Sitrling are raising $27m in capital for the acquisition which is anticipated to provide an initial 4.3% distribution yield and a 12% net IRR over the term of the investment. Stirling have lined up external funding from the CBA for a $25.7m facility with a 55% initial drawn and a 60% LVR covenant.
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