Melbourne, 3 September 2014 –Landmark suburban office buildings at Camberwell and Hawthorn are to be offered for sale by the Bennelong Group in a campaign tipped to the most sought after suburban Melbourne investment opportunity for 2014.
CBRE’s Justin Clarkson, Mark Granter and Jamus Campbell together with Colliers International’s Peter Bremner and Rob Joyes will steer the Expressions of Interest campaign for the Bennelong properties at 290 Burwood Road and 2 Luton Lane, Hawthorn and 293 Camberwell Road, Camberwell.
Mr Clarkson said the buildings would be offered for sale individually or in one line, presenting a unique opportunity for investors to acquire well-leased, high quality buildings in Melbourne’s premier suburban location.
“This is the single most important suburban portfolio offering in the last decade,” Mr Clarkson said.
“Melbourne’s inner east office sector, in particular the Camberwell and Hawthorn market, has experienced significant yield compression in the past 18 months, although still offers better returns than that of the CBD and St Kilda Road”.
Mr Clarkson added; “The yield compression is directly attributable to a lack of quality available stock and the flow on effect of investors being priced out of the CBD. In this environment, we expect the Bennelong portfolio to generate considerable local and offshore buyer demand from a broad range of private investors, syndicates, institutions and developers, due to the high underlying land value.”
Mr Bremner said the buildings were located in Melbourne’s most sought after suburbs that were reinforced by strong demographics and excellent amenity.
“The inner east is the strongest suburban office sector in Melbourne, evidenced by the strength of demand from both tenants and investors,” Mr Bremner said.
“Prime rents in the inner east precinct have increased for the third consecutive quarter, as a result of pent up tenant demand for prime grade space in the precinct. Given the current lack of quality options available over the short to medium term, further rental growth - and yield compression - is expected.”
All three Bennelong buildings benefit from quality tenancy covenants, involving listed brand names such as Skilled Group, Holcim, iinet and Bakers Delight.
The landmark 2 Luton Lane property is fully leased to Skilled Group, the leading provider of staffing services in Australia and New Zealand. The income of the property is $2,528,597 per annum with generous 4.5% increases and provides a Weighted Average Lease Expiry (WALE) of 7.6 years. The building comprises 5,661sqm of office space over three levels plus parking for 174 cars.
290 Burwood Road features excellent exposure and is anchored by multi-national listed Holcim, a leading supplier of aggregates and a company who is seeing excellent growth. The property comprises 4,400sqm of office space over 4 levels and features basement car parking for 114 cars. The property has a fully let net income of $1,811,203 per annum.
Also on offer is 293 Camberwell Road, a four-level 7,147 sqm building leased to a broad range of tenants, including Netspace, Wright Express and Bakers Delight. The current income is $2,528,597 per annum net with a 4.3 year WALE. The property benefits from excellent natural light, large 2,000 square metre floor plates and excellent basement car parking.
The total portfolio income is $7,320,444 per annum with a WALE of 5 years.
Expressions of Interest for the Bennelong portfolio close Thursday October 16 at 4pm.
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