25-07-14 - Investor in the pink after securing prized land lease
AN investor has snapped up the leasehold for a rare Trade- Coast industrial property owned by the State Government. The leasehold for the property at 157 Holt St, Pinkenba, was bought under the hammer by Coolshine Pty Ltd for $1.5 million plus GST.
Raine & Horne Commercial’s Lawrence Temple, who marketed the property with Phil Heggie, said the property was offered as an investment with a perpetual ground lease in place. “We had five registered bidders and two of them did the bidding,” Mr Temple said. “The unusual nature of this property indicated that sale by auction was the best option for the vendor. “The requirement for bidders to have completed the extra due diligence prior to auction day meant the owner would be dealing with cash unconditional offers, and not have to hope for the best with a conditional contract.
Last year the leasehold sold for $940,000 through a receivers sale. However, since the then owner refurbished part of the older style sawtooth 4922sq m office/warehouse on the 1.49ha site and Independent Bulk Network Pty Ltd signed a 15- year lease with two five-year options. The property, on the corner of Holt St and Curtin Ave East, includes a 1012sq m all-weather awning, sprinklers, crane, heavy power and docks. The deal was struck on a yield of about 11 per cent.
According to marketing documents, IBN will pay Coolshine about $440,000 gross a year while it will pay the State Government $234,740 a year plus outgoings. Mr Temple said the new buyer put an offer in when the leasehold was sold last year. “I think the reason for the significant change of price was that it now has a quality tenant and a long lease,’’ he said. “That certainty increases the value.” Mr Heggie said Coolshine was in discussions with IBN to increase the future functionality of the site. He said the new owner was reviewing options to convert the property to freehold. “He’s got control of a large site for a relatively small amount of money compared to its freehold value on the market,” Mr Heggie said. “There’s the potential to build there too.”