ASX-listed Growthpoint Properties has agreed to buy a modern office in Hawthorn East, Melbourne for $125 million, reflecting an income yield of 4.8%.
The deal, which was announced last month, follows its recent purchases of A-grade office buildings in Sydney and Canberra totalling more than $136 million.
Located at 141 Camberwell Road in Hawthorn East, the A-grade office comprised 10,249 sqm of office and ground-floor retail space, as well as 304 undercover car parks.
The building was completed in 2020 and was 99% leased to tenants including Cabrini Health, Miele and Siemens Healthineers, with a 6.8-year weighted average lease expiry (WALE).
Growthpoint said its property portfolio value grew 11.1% to $5 billion during the second half of last year, reflecting signs of returning confidence in the office market and continued momentum in the industrial market.
Leigh Melbourne, Nick Rathgeber, Mark Hansen and Josh Cullen of Cushman and Wakefield sold the property on behalf of Blueprint Projects.
“Bids were received from both onshore and offshore capital and from REIT’s and private investors, demonstrating a diversification of capital sources,” Melbourne said.
Rathgeber said the buyer was attracted to the strength of the tenant covenant and the strong WALE that provided security of income for the long term.
Last December, Growthpoint bought the 2-6 Bowes Street office building in Canberra for $84.6 million, reflecting a 5% initial income yield.
Other Melbourne office deals include Harbour Group’s sale of an office building in Burwood East for $13 million, at a 6.1% yield, last week.
Last month, Singapore-listed Straits Trading Company bought two office buildings in Docklands for $150 million, while Hong Kong-listed Link REIT entered into a $596 million deal with Oxford Properties to invest in an office portfolio including the 567 Collins Street building in Melbourne.
Rathdrum Properties also bought the eight-level office building at 570 St Kilda Road from Terraplex for $67.6 million last month, while Irongate Group acquired a stake in a grade-A office building in Cremorne for $130 million in December last year.
Outside of Victoria, Canadian pension investment manager PSP Investments and Charter Hall Group acquired an office development under construction in Brisbane last week.
Marquette Properties also exchanged contracts to buy an office tower in Brisbane’s ‘Golden Triangle’ from Dexus in a $420 million deal.
In Sydney, AEW sold an A-grade office tower in the Sydney CBD to the Shayher Group for $199 million last month, as Allianz Real Estate and the National Pension Service of Korea (NPS) bought a 50% stake in Sydney’s Commonwealth Bank Place for about $625 million.
Interested in the office market? Take a look back at Australia’s biggest single office sales in 2021.