This article originally appeared in Real Estate Source.
Real Asset Management has scooped up a 15 year old fully let office tower near Brisbane’s Central train station.
The off-market deal for 333 Ann Street is worth $141.1 million reflecting a 7.03 per cent net passing yield.
It also represents a windfall for the vendor, South Africa’s Growthpoint, which paid the former Australian Property Growth Fund, or APGF, $109.9m in December, 2011.
CBRE’s Bruce Baker and Peter Chapple were the agents.
Office makes five
The asset will be the fifth for the unlisted RAM Diversified Property Fund (RDPF), now worth close to $450m.
Last December the trust paid Charter Hall $70.9m for the ex-Virgin headquarters in Brisbane’s inner-north east Bowen Hills.
Spreading 9300 sqm on the banks of the Brisbane River, that asset, 56 Edmondstone Road, could following a rezoning offer significant residential development upside.
RDPF also controls 25 Constitution Avenue, Canberra, acquired from Lendlease last August for $115m, 2-4 Elsie St, in Sydney’s Burwood and – in Perth – the Halls Head Medical precinct (story continues below).
333 Ann Street
Incorporating the distinctive c1907 RS Exton & Co building, 333 Ann St rises 24 levels with 16,301 square metres of lettable area, including ground floor retail.
ARQ Group Enterprises, Brisbane Housing Corporation, CPA Australia, Kusch Group and Titan Recruitment are amongst the occupiers.
The Weighted Average Lease Expiry is 4.5 years.
“RAM was attracted to the high-quality Queensland asset as the state has a strong economic outlook and leads the charge in Australia’s economic recovery with nation-leading jobs growth and interstate migration fuelling historically high levels of population growth,” RAM head of Real Estate, Matthew Strotton, said.
“This attractive deal is accretive to fund WACR [Weighted Average Capitalisation Rate], increases exposure to the high growth Brisbane market, is in a desirable CBD location and provides access to strong contracted rent growth as well as potential value-add opportunities,” he added.
“We are at a point in the cycle where taking a position in pre-existing, well-let assets with long-term contracted income is very attractive,” according to the executive. “But more importantly, RAM as an active manager, continues to pursue opportunities to further diversify and enhance both income and longer-term growth prospects of the portfolio under management”.