RACQ offloads HQ with a leaseback
The RACQ has recorded a modest capital gain offloading a Brisbane office acquired 10 years ago then renovated.
The motoring group is reaping $72 million for 60 Edward Street from local fund manager Sentinel.
The deal reflects a high 9.34 per cent yield and substantial discount to (the estimated c$150m) replacement cost.
Sentinel will hold it in a trust – the 2032 Investment Fund – which recently raised $50m from investors.
It is the fund manager’s second recent counter-cyclical office deal coming a year since acquiring near-neighbouring Burnley, Melbourne, assets, for $80m – a 27pc drop on the June 30, 2023, value ($110.5m).
Market better than GFC for buyers: Sentinel
Over 15 levels, 60 Edward St contains 10,637 square metres in the city’s revered Golden Triangle.
The RACQ paid AMP Life $60m. It then spent $7.5m on a refurbishment.
The office was offered with a 27pc leaseback.
The federal government is another key occupier, leasing 19pc (story continues below).
On 1836 sqm, there are also over 100 car parks.
Sentinel chief executive officer Warren Ebert said market conditions “are better now for those able to buy than in the GFC”.
“We are seeking mispriced assets from motivated sellers, [looking] to improve the property with our hands-on management and administration,” he added.
“Another major influence on the commercial property market is the cost of building,” according to the executive.
“In Queensland, the state government is committed to spending many billions of dollars on infrastructure in the lead up to the 2032 Olympic, and the work is tied up in union contracts.
“Nothing else of scale is going to get built in Queensland cities in the coming years, particularly…office buildings and shopping centres, while the state continues to experience significant population growth.
“We expect there to be enormous price growth for existing assets and strong rental growth…[and are] aiming to pursue more office, retail and industrial assets”.
JLL’s Seb Turnbull, Paul Noonan and Kate Low represented the RACQ.
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