Adelaide, 17 December 2014 – The landmark 151 Pirie Street tower - one of the first of the “new generation” office buildings to be completed in Adelaide - has been sold to a local private investor for $72 million.
CBRE’s Alistair Laycock, Phil Rundle, Josh Cullen and Rick Butler steered the international Expressions of Interest campaign for the trophy asset on behalf of Real I.S. Australia, a subsidiary of the German fund manager Real I.S. Group.
The campaign generated significant national and offshore buyer interest as result of the blue chip tenancy profile and prime location of the building in the heart of the Adelaide CBD, overlooking Hindmarsh Square.
Constructed in 2006, the tower is fully leased to a mix of high profile private sector and state government tenants, including KPMG, Macquarie Bank, CBRE, BankWest and the South Australian Government, providing a secure, long term cash flow.
The property has been acquired by private Adelaide investor Viv Padman in a deal which reflects an initial yield of circa 7%.
CBRE’s Adelaide Managing Director Alistair Laycock said the building’s high quality tenancy covenants, long-term lease expiry profile and strong environmental credentials were key attractions for prospective purchasers.
“Opportunities to purchase new generation office assets in Adelaide, constructed post 2006, have been very limited and as a result there was a high level of interest from both private and institutional investors,” Mr Laycock said.
“Real I.S. Australia has maintained strong performance and building appeal, evidenced by foundation tenants KPMG, Macquarie Bank, BankWest, BUPA and Design Inc all extending their lease terms this year. This has resulted in the building having a strong WALE of 5.7 years, with major tenant KMPG having extended its lease term to 12 years.”
The building’s environmental credentials were another strong draw card for investors.
On completion the building was awarded South Australia’s first official 4 Star Green Star Design rating by the Green Building Council of Australia and last year, due to the proactive asset management by the owner Real I.S. Australia, the tower became the first commercial building in the state to achieve a 5.5 star NABERS Energy Base Building Rating without the need to purchase green power.
The step up to a 5.5 star rating was achieved following the implementation of a range of initiatives, including a rooftop solar installation to provide renewable energy for the base building.
Mr Rundle said the eight-storey building offered efficient and flexible floors of circa 1,500sqm, with commanding views to the north overlooking Hindmarsh Square and to the east towards the Adelaide foothills.
It also benefits from its location in the vibrant “Eastern Precinct” of the Adelaide CBD, offering convenient access supported by basement parking for 61 cars.
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