This article originally appeared in Real Estate Source.
Real Asset Management has picked up an inner-city office park for its Diversified Property Fund.
The Bowen Hills asset, 56 Edmonstone Road, is setting the group back $70.9 million.
Spreading 9300 square metres on the banks of the Brisbane River, the site forms part of an area affected by a proposed urban renewal.
Vendor Charter Hall held it in the Long Wale REIT after purchasing it from another managed fund for $90m in 2017; at the time the complex was occupied as Virgin Australia’s headquarters and subject to an eight year lease.
CBRE and JLL brokered the off-market deal.
Ex-Virgin Australia HQ
Developed in 2008, the Bowen Hills property contains three triple storey buildings with a total 12,427 sqm of A-grade area.
Each structure has a basement car park; all up there are 149 spaces and 42 motorbike spots.
There is also an onsite café.
Virgin vacated after temporarily entering administration last year.
Four months ago, Fujifilm Business Innovation leased 2865 sqm being Building C.
Density, use changes expected
RAM Head of real estate, Will Gray, said the Bowen Hills property is the fourth for DPF – its flagship unlisted fund which targets industrial, office, retail and alternative product (story continues below).
“RAM was attracted to the office campus because of its scope for short to medium-term positive leasing absorption with the benefit of long-dated income coverage from the outgoing vendor,” he added.
“The asset sits in a highly desirable and in-demand fringe CBD location that is expected to benefit from favourable planning outcomes and this will allow increased site density and the variety of uses permitted,” according to the executive.
“Ultimately it’s a significant land holding in a prime CBD fringe location with attractive long-term value-add potential and is immediately income generative”.
Last month, RAM, for its Essential Services Property Fund, paid $20.5m for a healthcare facility at nearby 1/36 Edmonstone Rd.
Flagship fund grows
The Bowen Hills acquisition come a fortnight since RAM, for the DPF, spent $23.44m for the Halls Head Medical Centre – one of the largest assets of its type in Perth.
Four months ago, the fund paid $115m for Canberra’s seven level, 16,679 sqm Alan Woods building, which became fully leased in March.
Lendlease’s Australian Prime Property Fund was the vendor.
In 2018, DPF outlaid $49m for a six storey office in Sydney’s west Burwood.
Altis Property Holdings was that seller.