Office investment property in Canberra’s Belconnen listed
A growing appetite for Canberra’s office market has prompted the Willemsen Group to list Belconnen’s Northpoint Plaza for sale.
The family group has owned the office investment property since it was developed in 1987.
The listing comes as investors are turning their sights to Canberra’s secondary office market, with a series of transactions completed or in the offing in the lead up to 2018.
The trend is being driven by the anticipation of strong rental growth and a pickup in tenant demand in the short to medium term.
Canberra Times added that the building's agent suggested a buyer could use the block for apartments or a hotel, leaving the future for its tenants unclear.
Centrelink leases about 16 per cent of the building, which also houses Quest Training, Sonic Healthcare, Marist Youth Care, medical and other offices.
CBRE Research highlights that secondary grade net effective rents recorded a 6% annual increase in the period to Q3 2017. Meanwhile, white collar employment grew 3.1% over the year to March 2017, with the business services sector adding 5,300 employees during that time-frame.
The Belconnen listing is being handled by CBRE’s Michael Heather.
“Northpoint Plaza presents a compelling value-add opportunity that will be acquired at below replacement cost, yet is 75% occupied and provides substantial passing income,” Heather said, adding that there was also the opportunity to increase the returns through a refurbishment and releasing strategy.
“Given its strategic location in the Belconnen Town Centre opposite Westfield Belconnen, the site would also suit future residential redevelopment or conversion to hotel or serviced apartments to capitalise on its park frontage and upper level lake views.”
Recent transactions of value-add office assets include 39 Brisbane Avenue, Barton, which was purchased by boutique fund manager Quintessential Equity for $16.5 million. Another Barton property at 42 Macquarie Street is currently in due diligence with a Sydney-based investment group.
Heather noted that Belconnen was also on investors’ radars as one of the better performing secondary office markets in the ACT.
Belconnen’s secondary vacancy rate is currently 5%, comparing favourably to Tuggeranong (23%), Woden (21%) and Civic (15%).