19/07/2013 - Buyers see value in the north
Phil Bartsch
INTERSTATE investors are still seeing value in crossing the border to flush out deals in southeast Queensland’s commercial market. In one of the latest deals, an investor from Coffs Harbour on the NSW north coast has forked out $2.44 million for a strata-titled office at Stafford in Brisbane’s north. The 586sqm ground floor tenancy at the North Park Business Centre is occupied by Queensland Health Renal Services on a 10-year lease. It generates a rental income of $205,000 a year net plus GST and outgoings, equating to a yield of 8.4 per cent. Trent Bruce and Hudson Dale from Raine & Horne Commercial, who negotiated the sale, have been behind a number of deals in the development.
Mr Bruce said the latest sale was the culmination of a progressive marketing campaign during the past 12 months that resulted in ‘‘a dozen or so’’ inquiries from genuine buyers. ‘‘We had a couple of offers on the table for this tenancy and eventually we were able work this one up to finalisation,’’ he said. ‘‘The buyer was looking to diversify from down in NSW and get something up here. ‘‘He sees some future growth and opportunity in Queensland and really wanted to put his foot on something in Brisbane.
‘‘Some people were put off by the strata nature of the property. ‘‘But just the strength of having a 10-year lease to the Queensland Government obviously shows good longevity and the commercial component of this development is only seven strata titles so it’s quite manageable.’’
The property was sold with a substantial fitout tailored to the specifications of the government tenant. Mr Bruce said the buyer also was attracted by its location 800m from the Airport Link tunnel entry/exit and only 7km north of the CBD.
‘‘There’s definitely more appetite in the market place,’’ he said. ‘‘If anything, there’s a shortage of quality investments out there at the moment. ‘‘And with the low interest rate environment, if you’re buying around the 8 per cent mark and borrowing around the high 5s or 6 per cent mark, it’s positively geared.’’ Mr Dale said activity had been picking up in the northside precinct since the completion of the Airport Link tunnel. ‘‘We’ve been fielding a lot more inquiries in recent months,’’ he said.
The North Park Business Centre is part of a mixed use development that also comprises 156 apartments across three buildings developed by RLW Developments on the corner of Webster Rd and Babarra St.
Source: The Courier Mail, Primesite, 19 July 2013