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Abacus pays $93.5 million for Computershare office

People & Companies / Latest News

Australia

Feb 02 2018

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Abacus Property Group has paid $93.5 million on a tight 5.85 per cent yield for an Abbotsford office building fully leased to Computershare in an off-market deal brokered by CBRE National Director, Mark Wizel with Lewis Tong and Kiran Pillai. 

The 452-484 Johnston Street property was sold subject to a long term (seven year) lease

to Computershare Ltd at a net annual rental of $5.47 million.  The building has a net lettable area of 16,577 square metres over three levels on a 16,920 square metre site with 140 metres frontage to the Yarra River and 485 on-site car spaces. 

Mr Wizel said the sale demonstrated the ongoing demand from buyers to secure income producing assets and the continuous hunt for yield.

``This is a very strong vote of confidence in Melbourne’s city fringe leasing market which reflects a strong desire and willingness for buyers like Abacus to pay sharper yields for assets that have significant underlying land value,’’ Mr Wizel said. 

He said confidence in Melbourne’s office leasing market, which has just recorded the tightest CBD vacancy level - 4.6 per cent -  in nearly ten years, was now being correctly factored in to prices being paid for commercial office buildings. 

``A tightly held sub-$100 million Melbourne CBD and St Kilda Road market, buoyed by strengthening tenant demand and the obvious potential for rental growth, is resulting in buyers having to look to the city fringe and suburbs in order to secure assets and that is going to drive further yield compression,’’ Mr Wizel said.     

The transaction is the first for new Abacus and former Novion Property CEO, Steven Sewell. 

Chinese developer Hengmao Group’s subsidiary, LYZ Property Group, paid a lucky $88,888,888 for the property 18 months ago, in a triple net leaseback to Computershare. The deal was also brokered by the CBRE team.

Mr Wizel said while consistent commentary in late 2017 suggested a cooling in certain parts of the Melbourne market, the year had started with a very high level of optimism and confidence from both investors and developers. 

He said despite several years of record investment sales and continually firming yields Australian commercial property was likely to see another major run of increased values.

``There remains a very strong demand both domestically and off-shore for quality Australian property assets and with growing tenant demand for office space in particular, especially on the eastern seaboard, and the now much stronger global economic outlooks in USA and China and to a lesser degree in Europe, that is not about to change any time soon,’’ Mr Wizel said. 

 

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