At an auction held today by Cushman & Wakefield, an Officeworks-tenanted asset located in Brisbane’s Capalaba has sold under the hammer for $8.425m, on a yield of 5.1%.
The property was contested at auction by seven bidders across Melbourne, Sydney and Brisbane, selling to a Sydney-based high net worth private investor. The sales campaign, managed by Cushman & Wakefield’s Aaron Dahl, Michael Collins and Tom Moreland attracted 80 genuine enquiries almost all from private individual purchasers.The property at 92 – 94 Redland Bay Rd, is leased to Officeworks who have been onsite since 2004 and recently committed to a new 8-year lease to 2027 with options to 2037. The current net annual rental income is $431,278 pa (ex GST).
The high-profile site is located in a retail precinct 17 km from the Brisbane CBD, which has an estimated 550,000 residents within a 15 km radius. Capalaba has limited commercial land opportunities and sites such as this rarely hit the market. The last notable sale along Redland Bay Road was the Freedom Centre handled by Cushman & Wakefield and sold in 2018 for $24,275,000. The Officeworks investment comprises a large 4,856 sqm allotment and a 1,782 sqm standalone facility purpose-built in 2004. This is the first time offered to market.
Cushman & Wakefield’s National Director, Head of Investment Sales, Michael Collins, said: “Officeworks are a national blue-chip tenant, and their sales have grown almost 28% for the first 5 months of 2020 amid the shift to flexible work. The level of interest in this asset again reinforces investor demand for properties with strong leasing covenants and tenants that are performing strongly throughout the pandemic.”“This is only the third Officeworks-tenanted property to come to market in recent years and they are always strongly contested. Given the property is a modern, purpose-built facility in a trade catchment servicing a substantial population, it only added to the appeal.”
Cushman & Wakefield’s Director, National Investment Sales, Aaron Dahl, said: “This is an outstanding result for the vendor with active bidding pushing the sale price well beyond reserve. Particularly given the interest from interstate investors, it’s clear that the Brisbane market remains highly resilient.”
Cushman & Wakefield’s Associate Director, National Investment Sales, Tom Moreland, said: “We anticipate the strong competition for passive investments such as these will continue as interest rates remain at record low levels, particularly those that are perceived to be ‘COVID-proof’’.