Alceon Qld has sold a Fitness First gym in Lutwyche, Brisbane to Properties & Pathways for $16.87 million.
The building, located on a 2,602 sqm site at 461 Lutwyche Road, was a commercial office building before it was converted into a Fitness First health and wellness facility.
Fitness First leased the property for 15 years, with six years remaining on the lease.
The property was sold with a weighted average lease expiry (WALE) of 6.3 years, a net passing income of $1,029,411 and an initial yield of 6.1%.
Alceon acquired the property as part of a multi-faceted transaction involving another property in Bowen Hills.
Knight Frank Matt Barker and Blake Goddard negotiated the deal.
Barker said the property was attractive to buyers as the income was underpinned by a long-term lease to a highly experienced and long-established Fitness First gym, but it also offered future redevelopment potential.
“The property’s fundamentals, including large floor plates, excellent natural light and a high-exposure corner position, also provide the opportunity for adaptive re-use for other occupiers including medical, office and other similar uses.
“The elevated site is zoned DC2, providing long-term development potential in a strong performing inner-city precinct.
Goddard said the property was in a solid location in Brisbane’s inner city, being a high-growth suburb and an affluent location.
“It’s situated on a highly-exposed site on a main road, with easy access both into the city and out of the city,” he said.
“Market Central Lutwyche, a neighbourhood shopping centre anchored by three supermarkets, which has just had a $60 million extension, is just two minutes away, with plenty of other amenity in the surrounding area.”
Recent commercial property deals in Brisbane include an EG fund’s purchase of a half stake in the Grand Plaza shopping centre from Invesco at an acquisition core capitalisation rate of close to 5.25% this week.
Charter Hall and its wholesale industrial partnership with PGGM bought a brownfield industrial site in Bowen Hills for $60 million recently, while PSP Investments and Charter Hall Group acquired an office development under construction in Fortitude Valley.