Peak Equities buys API’s Camberwell headquarters for $27.5 million

Peak Equities has purchased a  five-level, 5,420sqm office building in Camberwell Junction for $27.5 million.

The site of the Australian Pharmaceutical Industries (API) headquarters, 250 Camberwell Road, generates $2 million per annum in net passing income from API and ground-floor café operator Camberwell Food Group, with leasehold interest from Melbourne Anglican Trust Corporation, resulting in a passing yield of 7.5 percent.

Colliers International’s Peter Bremner, Rob Joyes and Rachael Clohesy sold the property on behalf of Sydney-based investor and syndicator Bricktop Group through expressions of interest.

Mr Bremner said the long ground lease to Melbourne Anglican Trust Corporation expires on September 30, 2075.

“The purchaser recognised the quality of the asset in the prime Camberwell location and was seeking a higher-yielding investment so, while acknowledging the leasehold structure, they will enjoy an attractive 7.5 per cent yield based on the six-year WALE,” he said.

“If the property was sold with a freehold title, it would most likely have resulted in a sub-six per cent yield.

Peak Equities managing director Tom Borsky said the location of the property, in a tight office market where demand was expected to grow far more quickly than supply, was the principal driver of the purchase.

“Furthermore, our company sees the ground lease structure as an opportunity, rather than an encumbrance,” he said.

“Following global trends, this form of property ownership is likely to become more commonplace.”

Bricktop Group purchased 250 Camberwell Road through Colliers International in 2013.

Bricktop’s managing director Michael Balkin saying now was a suitable time for the syndicate to realise its investment.

 “We identified the inherent value in the leasehold interest when we acquired the property, something that we believed many parties did not understand at the time of the original sale,” he said.

“Accordingly, we were able to secure the purchase at an attractive price for our investors.”