Zero stamp duty benefits Centuria's purchase of Bendigo and Adelaide Bank HQ in South Australia

Zero stamp duty benefits Centuria's purchase of Bendigo and Adelaide Bank HQ in South Australia
Zero stamp duty benefits Centuria's purchase of Bendigo and Adelaide Bank HQ in South Australia

Centuria has settled on its 80 Grenfell Street, Adelaide purchase with half of the property to be held in a single asset fixed-term unlisted fund.

Demand for the fund was unprecedented with the offer closing 200% oversubscribed in only four and a half days. 

Centuria raised $57.1 million, with 30% coming from major overseas investors.

Jason Huljich, head of real estate and funds management for Centuria, said Adelaide offers some of the best value in the country right now.

"The infrastructure pipeline for South Australia will drive economic and job growth…the $90 billion submarine and frigate contract is forecast to create up to 8,000 direct and 25,000 direct roles," Huljich said.

He added as of 1 July stamp duty was zero in South Australia, "which means transaction costs are significantly lower than in other states”.

It is one of the Adelaide CBD’s most high tech buildings added to its $4.7 billion portfolio.

The ASX listed Centuria Capital Group has exchanged unconditional contracts for the purchase of a 50% stake in the Bendigo and Adelaide Bank headquarters at 80 Grenfell Street for $92.3 million. 

Acquisition of the $184.6 million office tower was made in partnership the Lederer Group, which will take up the remaining 50% stake.

80 Grenfell Street is a A-grade office building, that is 96% let to Bendigo and Adelaide Bank.

The weighted average lease expiry (WALE) is long, at 7.3 years and rental increases are fixed at 3.75% annually.

Huljich said the Adelaide market has become increasingly attractive to property investors.

“The SA government’s decision to reduce stamp duty has been a positive strategic move to help drive investment into the state,” he said. 

“Compared with other states, where stamp duty averages 5.5%, SA’s is zero from July 1. 

“When transaction costs are lower, yields are higher, which means better returns for investors.”

Tags: 
Adelaide Office Market

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