Boutique Fund Manager, Stirling will acquire a commercial asset and an undeveloped car park in Liverpool for $46m. The 8 storey B Grade commercial building in Northumberland St provides 7,284sqm of net lettable area of which approx 980sqm is currently vacant.
The vendor, Scenic NSW will provide a 6 month rental guarantee over the vacant tenancies. Existing tenants include: CBA, Westpac, Catholic Healthcare, The Benevolent Society and Brydens Lawyers.
Stirling report that the current passing rental in the building is approximately 13% below Grade B market rents and 60% below Grade A market rents, providing them scope to lift the rental profile of the building which has a weighted average lease expiry of 3.5 years. The office component of the transaction reflects an equivalent yield of 6.7% if fully leased at market.
The Bathurst Street development site covers 1,334sqm and is currently used for on-grade car parking for 57 vehicles.A Development Application has been lodged for 66 apartments and 2,508 sqm of commercial use. Stirling expect to sell the development site once the DA is approved.
Sitrling are raising $27m in capital for the acquisition which is anticipated to provide an initial 4.3% distribution yield and a 12% net IRR over the term of the investment. Stirling have lined up external funding from the CBA for a $25.7m facility with a 55% initial drawn and a 60% LVR covenant.