Growthpoint, ISPT trading renovated Canberra office
Growthpoint is buying a Canberra office for a single asset trust calling on investors.
Developed in 1986, refurbished in 2022 – but still considered B-grade – 2 Constitution Avenue is setting it back $90.1 million.
ISPT is the seller.
It held the office for the diversified Core Fund in 2004.
CBRE brokered the off-market deal.
Dramatic metrics
Growthpoint would be securing 2 Constitution Avenue on a high nine per cent yield.
It is “deep value buying” the manager added “purchasing at $4626 per square metre, with replacement cost (including land value) c80pc higher”.
At its peak, the property was worth 44pc more (c$130m), it said in marketing material for the proposed wholesale Growthpoint Canberra Office Trust.
Canberra carries one of the country’s lowest CBD office vacancy rates – 9.5pc in the second half of 2024, according to the Property Council of Australia (story continues below).
It has been rising though, from 8.6pc last year and 5.5pc in 2022 – in large part, because of new supply.
2 Constitution Avenue
On 4984 sqm near the Andrew Ingliss Clarke statue erected four years ago (pictured, top), 2 Constitution Ave contains 19,461 sqm – 4.4pc of which is vacant – and 178 car parks.
“Eighty eight per cent of the passing income is secured by Commonwealth and ACT government tenants with staggered lease expiries,” the manager added.
“[It also has] the proven ability to attract government and corporate tenants, with 8379 sqm of leases executed since May, 2023,” it said.
Growthpoint is aiming for a 9pc annual distribution and 15-16pc internal rate of return over five years.
It is aiming to make the office carbon neutral over that time.
An upgrade to the foyer, streetscape and end-of-trip facilities is also planned.
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