ISPT has bought the headquarters of Victoria’s Country Fire Authority in Melbourne’s eastern suburbs on behalf of its CIB fund from Singapore-based TE Capital Partners for $35.8 million.
The 8 Lakeside Drive office building has 4,502sqm of net lettable area and is situated on a 5,456sqm site in Burwood East – about 20km east of the Melbourne CBD.
The acquisition represents a yield of just under 4.5% on the fully-leased net income and sets a new price benchmark for the Tally Ho business park.
“The acquisition of 8 Lakeside Drive, Burwood East aligns with the ISPT CIB Fund investment strategy to strengthen income security and tenancy profile,” said Georgina Bishop, ISPT CIB Fund and Sunsuper Australian Mandate Manager.
“This is the fund’s first acquisition in 20 years and our first step to growing the portfolio as its new investment manager, while creating enhanced value for our investors.”
CFA recently renewed on a new 10-year lease term at the property, which has been home to the group since its construction in the late 1980s.
The property offers a 67m frontage in a prime location within the Tally Ho precinct, a key hub for government agencies and emergency services providers.
CBRE’s Tom Ryan and Scott Orchard managed the off-market sale campaign on behalf of TE Capital Partners.
“The sale further demonstrates the strong and rising demand for long-WALE assets with secure income streams, especially those linked to essential services or the government,” Mr Ryan said.
“TE Capital purchased the asset four years ago, with the CFA on a short lease at the time, and during their ownership they have repositioned the property and signed a new 10-year lease on market terms with the CFA.”
“The tightly-held nature of the market at present is resulting in a number of groups aggressively targeting opportunities on an off-market basis, which is resulting in incredibly strong outcomes as evidence by this sale,” Mr Orchard said.
The deal comes after ISPT recently sold a 24-storey office building in Brisbane’s CBD to Cromwell Property Group for $184.7 million.
In April this year, TE Capital Partners acquired interests in a 434-hectare land parcel in Melbourne’s North for an undisclosed sum.
TE Capital Partners also purchased the 20-storey office building at 350 Queen Street in Melbourne’s CBD for $145 million in July last year.
ISPT assumed the trusteeship and management of the CIB Fund in November 2020, which was formerly managed by Charter Hall.
The fund has a portfolio of Victorian law courts and police stations valued at about $155 million as of end-September 2021.