ACCC's Canberra head office bought by Placer Property fund

The fund manager Placer Property Group have bought the NewActon East building in Canberra, home to the head office of the Australian Competition and Consumer Commission (ACCC).

Placer is seeking to raise $26.5 million in equity from self-managed super funds and individual investors for the unlisted property fund.

It offers investors an initial return of 7.75% paid quarterly.

The NewActon East Property Fund is a single-asset syndicate which will run for approximately seven years.

The fund’s only asset will be the commercial component of 21-23 Marcus Clarke Street, an ‘A’-grade, mixed-use building in the NewActon precinct on the fringe of the Canberra CBD.

It was constructed in 2007 as an eight-storey, mixed-use office, retail and residential development. The fund has only acquired the building’s office and retail components (five storeys plus 115 car parking spaces) – the remaining three storeys of apartments remain in separate hands.

Purchasing the asset will require $45 million to $49 million, including costs.

It is expected the asset to produce reliable income, based on:

• 98.5% occupancy;
• Contracted fixed rental increases of at least 3.35% per annum;
• A WALE of 9.2 years (by income); and
• A credit-worthy major tenant – 79.8% of passing rent is secured by a lease to the ACCC until 2022, the year after the initial term expires.