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.

Previous
Next

The property

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

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
Address79-83 High Street, Kew
Acqn Date5 June 2019
Lettable Area3,361 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