Grenfell Street Adelaide sells for 8.4% yield
77 Grenfell Street Adelaide, an A Grade office building has been sold by German Fund Manager Real IS for $103.5M. The building was acquired by Wingate/IPG on a 8.4% passing yield.
The 16,484sqm property is nearly fully occupied by South Australian government's Department of Planning, Transport and Infrastructure whose current lease will end in 2021, with further lease options. The property has been on the market for 12 months with price expectations of around $105m. In early 2018, Real IS were considering a listing of their portfolio in order to improve liquidity for their investors but later scrapped the idea in favour of single asst sales.
South Australian commercial assets have become more attractive this year following the removal of stamp duty which otherwise adds 5.5% to the transaction costs of the asset.
So far this year, some $672M of commercial assets have changed hands in Adelaide, including 80 Grenfell for $184M, 12 Franklin for $135M and 60 Flinders for $100M.