10 year Federal Government lease set to drive buyer interest in South Australias Centre of Defence
10-year Federal Government lease set to drive buyer interest in South Australia's 'Centre of Defence'
| 22 September 2020
Domestic and international investors are tipped to circle a 2.5ha office precinct and development site in Australia’s premier naval precinct.
CBRE and Knight Frank have been appointed to market the prominent Adelaide property, which is situated in the nationally significant Osborne Naval Shipyard.
Branded the Centre of Defence, the 620-628 Mersey Road asset incorporates two campus-style office buildings providing a net lettable area of 8,006sqm. The offering also includes 3,000sqm of vacant land earmarked for the development of two additional office buildings totalling 6,000sqm.
The site is fully leased to Australian Naval Infrastructure, a Commonwealth Government Business Entity, from July 2020 on a new 10-year lease with options.
CBRE’s Ian Thomas and Alistair Laycock have been jointly appointed with Knight Frank’s Guy Bennett and Oliver Totani to steer the International Expressions of Interest campaign on behalf of the owner, Prime Space Projects.
“The South Australian economy is well positioned to rebound post COVID-19, underpinned by ongoing investment in the defence sector,” Mr Thomas said.
“620 Mersey Road is situated at the epicentre of the State’s defence precinct, which is earmarked for over $90 billion in spending across multiple projects in the next three decades. This will be a key draw card for purchasers, particularly in light of the property’s long-term government lease and future development potential.”
Mr Thomas noted that the abolition of stamp duty in South Australia was continuing to drive new investment in the State and this would help fuel buyer interest.
Knight Frank’s Mr Bennett said the ability to secure a ten-year income stream, linked to a Commonwealth Government owned tenant was a rarity anywhere in Australia.
“This is a true defensive grade investment which offers further development upside, and we expect it to be highly sought after,” Mr Bennett said.
“This asset is a rare, privately owned asset in the most significant naval industry hub in Australia, which will be the home of naval construction and education for decades to come. It is the office hub of the precinct, which is expected to attract a work force of around 15,000 people through the Government’s Naval Ship Building Plan.”
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