Government-leased assets remain popular, with a New South Wales-based investor buying a commercial building leased to the Australian Federal Police (AFP) in Cairns for $17 million.
Located at 420-422 Sheridan Street, the 2,155 sqm commercial building sat on a 5,489 sqm site, with around 80 car parks.
The purpose-designed and built facility adjoined the Cairns local and international airport, providing the AFP with ease of access to critical transport infrastructure. It was constructed in 2014 to accommodate a 5-Star NABERS rating.
The property is leased to the AFP on a 15-year lease, with two five-year options leading up to an expiry of 2039.
Christian Sandstrom and Greg Wood of Knight Frank Queensland, in conjunction with Danny Betros of CBRE Cairns, ran the Expressions of Interest campaign on behalf of a Victorian investor.
The $17 million sale price reflected a yield of 6.5%, based on the passing net rental.
Sandstrom said the campaign resulted in good interest from a wide range of private investors and syndicators, generating more than 80 enquiries in total.
“At the close of the campaign seven offers were received and terms were agreed with a private investor from New South Wales on a cash unconditional basis,” Sandstrom said.
“This investor already owns a portfolio of government-leased assets and was attracted by the calibre of the Commonwealth tenant, high quality of the building and the fact that the property was purpose-designed and built for the AFP’s specific accommodation needs.
“In addition, the property had a seven-year WALE and remaining options for 10 years.
“The Melbourne-based owners were extremely pleased with the result especially given the two per cent increase in the official interest rate since they decided to divest the asset, which had been in their family since 2014.”
Sandstrom said the Cairns market was performing strongly, supported by tourists from within Australia during COVID and now overseas visitors beginning to return to Far North Queensland and strengthening local businesses.
