Weekly Transaction Update - 22nd February 2019
This week we recorded 14 major transactions worth $270M
Forza in Brisbane Re-Leasing Play
Melbourne-based property fund manager Forza Capital has bought its second building in Brisbane's fringe office market, a three-level office block at 55 Russell Street in South Brisbane for $23.65 million.
The acquisition represents a capital value of $5,795/sqm and a fully leased yield of 6.8%.
The vendor was the family company of Paul and Glynnis Williams of West End, who have owned the property for some time.
The 4081sqm three storey building has basement parking for 55 vehicles and is tenanted by Queensland Indigenous Substance Misuse Council and other Government Departments. Approx 1,460sqm is currently vacant. The property has a five-year weighted average lease expiry.
The fund manager also owns a 11,300sq m building nearby at 10 Browning Street, which it acquired in 2016 for $65.5 million.
Chinese Developers trading out
A larger number of development sites are the hitting the market with many Chinese backed development groups leading the charge to the exit doors.
The latest to have traded is Golden Age who have offloaded their 85 Spring Street Melbourne development for $114M to US-headquartered Proprium Capital, which was spun out of Morgan Stanley in 2013.
Golden Age acquired the site in Jan 2017 for $75M from Grocon which had an appoval The project at 85 Spring Street has approval for about 225 apartments after Grocon trimmed a 44-level proposal to 39 levels and reduced the number of apartments in order to secure approval. Golden Age relaunched the project as a $400m mixed use scheme with 138 apartments and a $200m, 26-storey hotel fronting Little Collins Street.
Golden Age then partnered with Starwood who intended to take the management of the Hotel in the Scheme, however as the apartment market has dried up, the pair have sold the project to Proprium who will likely retain the existing 10,700sq m Spring Street building.
Proprium Capital were on the hunt for new opportunities following their sale last year of 72 Christie Street, St Leonards to Singaporean company UOL for $154m.
Also in Melbourne, developer Woodlink has also scrapped plans for a $360 million residential development on St Kilda Road and is now putting the existing building, which is now 85% vacant, on the market. Woodlink acquired the site in late 2015.
Other Chinese backed developers trading out are Jin Lian Group whose receivers sold a 7,843sqm site in Carlingford, Sydney for $21.5M. The site has an approval for 120 apartments but failed to attract sufficient pre-sale interest before creditors demanded their capital back.
Also in Carlingford Yi Fang Group is selling a development-approved site in Carlingford in Sydney's north for about $20 million. The 5820sq m site has an approval for 118 apartments across three buildings.
Pialba Place Centre sells for $35M
Fund Management Group M/Group acquired Pialba Place Centre for $35M from the Vinta Group. The Centre was acquired in an off-market transaction of which $22million was raised through a company-managed property investment fund.
The purchase price represents a yield of approximately 8% on passing net income.
The Centre is anchored by Coles and Big W and approx 30 specialty stores with a Weighted Average Lease Expiry (WALE) of 7 years.
The asset is 3.5 hours drive from Brisbane at the gateway to Fraser Island and located on a 4.38 hectare site that occupies an island block surrounded by three street frontages.