79 – 83 High Street Kew
This well located office building was purchased for a private client in June 2019 for $19.0 million. Terraplex is acting as Trustee and Asset Manager of the Fund.
Features of the property at the time of purchase included:
Two storeys of office accommodation with 3,361m2 NLA that has been sub-divided into 19 lots with an average area of 175m2.
90% leased to thirteen tenants with varying lease expiries and a 2.5 year WALE (by income) which provides a secure cash flow and risk diversity against major vacancy.
Secure ground floor with basement car parking providing for 112 car parking spaces.
Outstanding suburban office location 100 metres from Kew Junction and 2 km CityLink and Eastern Freeway interchange.
The investment strategy highlighted the need to:
Invest in a commercial building with good holding income and clear long term value add potential, including expanding the NLA.
Explore the utilisation of a flexible design that allows tenants to expand into adjoining vacant suites.
Consider the potential for significant rent revision and value capture when leases expire given the below market rents.
Undertake a planned capital expenditure project to paint and re-landscape, improving tenant amenity and future building appeal.
Assess further re-dvelopment potential (STCA) as the Property’s location and significant site area and zoning provides opportunity to add more office space on balcony areas, above car parks and on roof.
Look at the fact the building is already subdivided in 19 lots, allowing for a strategic sell-down of the whole building or separate offices to investors / owner occupiers and where there is significant investor demand.
|Performance to date|
|Address||79-83 High Street, Kew|
|Acqn Date||5 June 2019|
|Lettable Area||3,361 m2|
|Passing Net Income (at Acqn)||$0.95 M pa|
|Est Fully Leased Net Income||$1.1 M pa|
|Purchase Price||$19.0 M|
|Equity Raised||$11.0 M|