COMMERCIAL SALES - cushmanwakefield.com.au - V
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COMMERCIAL SALES cushmanwakefield.com.au
140 St Georges Terrace, Perth WA
Improvements comprise a 29 level A grade office tower (plus basement parking over 2 levels) located in a prime position of the CBD at
the corner of St Georges Terrace and William Street.
The office tower has 28 upper office floors with floorplates measuring 1,014 to 1,103 square metres.
There is also an external office facing over William Street of 300 square metres resulting in a total office NLA of 29,796 square metres.
The retail component amounts to 102 square metres and storage to 373.4 square metres.
The ground floor of the tower comprises the lobby, a café and a separate external commercial building.
The basement car park provides access to 282 tenant bays (including 11 motorbike bays) and the public car park which is leased to
Wilson Parking and is shared with 152-158 St Georges Terrace (Central Park) comprising 442 bays from which the subject has a
41.778% share. The tenant car park beneath the building incorporates modern end of trip facilities.
Sales Analysis
The building was last subject to a major refurbishment in 2017 and many of the floors have been subdivided with 57 separate tenancies
currently in occupation.
Benefited from a 4.5-star NABERS Energy rating and 4.0 star Water rating.
KEY DETAILS
Sale Date: April 2021
Sale Price: $254,850,000 (GST exclusive)
Vendor: AMP capital Investors Limited
Purchaser: Primewest
Land Area: 5,167m²
NLA: 29,504m²
Parking: 282 spaces ( 1 space per 105m2 of NLA)
Occupancy Rate: 91.4%
No of Tenants: 57
Net Passing Income: $18,751,867 per annum
INPUTS ANALYSIS
Market Rentals (Avg): Office: $584/m 2
Passing Initial Yield: 7.36%
Avg Cmpd Mkt Growth: 2.59% (10 year avg) Core Market Yield*: 6.61%
Leasing/Incentive Letting Up: 12 months @ 50% retention IRR (after costs): 5 yr 10 yr
Allowances: Incentive: 50% net 4,65% 6.84%
Cap Adjustment Period: 36 months - expiries Rate/m² NLA: $8,417/m²
Terminal Yield: 6.90% WALE: Income Area
Capital Expenditure $14,850,000 2.8 yrs 3.05 yrs
Immediate:
Capital Expenditure $15/m2 ($454,197 per annum commencing yr 4) Average Running Yield: 5 yr 10 yr
Ongoing: (before capex) 7.14% 6.72%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific
issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
815 PACIFIC HIGHWAY, CHATSWOOD NSW
A circa 1974 retail/office tower which has undergone a number of refurbishments, prominently located on the corner site of the Pacific
Highway and Help Street at the western entrance to the Chatswood CBD. Comprises a multi-level commercial building with two levels of
basement parking, ground floor foyer/lift lobby plus two retail tenancies, thirteen upper levels of office accommodation and roof-top plant
rooms.
KEY DETAILS
Sale Date: April 2021
Sale Price: $56,000,000 (Gross Headline)
Vendor:
Purchaser: Sales Analysis QTKT Chatswood
Fivex Services Pty Ltd
NABERS Rating: Energy: 3.5 Star Water: 2.5 Star
Land Area: 1,657m²
NLA: Office 6,209.7m² (91.8%)
Retail 556.0m² (8.2%)
Total 6,765.7m²
Parking: 88 basement spaces (1:77m2)
Vacancy: 0% - (22 car spaces vacant & 1,469.9m² or 21.7% NLA covered by 2 year
rental guarantee)
No of Tenants: 29 tenants
Net Passing Income: Circa $2.9m
INPUTS ANALYSIS
Market Rentals: Office: $380/m - $450/m² net ($422/m² net avg)
2
Passing Initial Yield: 5.14%
Retail: $329/m² net (passing) Core Market Yield*: 5.20%
Avg Cmpd Mkt Growth: 3.27% gross (10 year) IRR (after costs): 5 yr 10 yr
Outgoings: $881,096 ($130/m ) 2
4.14 % 6.20%
Leasing/Incentive Downtime (10 yrs): 6 – 12 months @ 50% retention Rate/m² NLA: $8,277/m²
Allowances: Incentive (10 yrs): 17.5% - 27.5% gross (21% avg) Weighted Average Lease Income Area
Cap Adjustment Period: 24 months – capturing 55% NLA Expiry (Yrs): 2.1 yrs 2.2 yrs
Terminal Yield: 5.50% Average Running Yield: 10 yr
Capital Expenditure: Total Capex: $878/m2 (10.6% of value) (before capex) 5.2%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
#Analysis conducted inclusive of rental guarantee over vacant space.
Lease Expiry by Area Tenant Composition by Net Passing Income
3,000
24 mths; 55%
NLA
2,500
Rental Guarentee - 21.7%
2,000
Ptree Pty Limited - 7.5%
1,500
1,000 The Prime Advisory Pty Ltd -
7.1%
500
Smoke Alarms Australia Pty
- Ltd - 6.7%
Cashrewards Pty Limited -
4.4%
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• The building was sold via an “open-market” campaign in April 2021. The sales campaign was competitive, with bids received from a mix of local
privates, syndicates and institutions, some with investment bank funding
• The property is essentially fully leased (apart from 22 vacant car spaces and subject to a two year rental guarantee over 1,469.9m² or 21.7% of NLA)
to 29 tenants, with seven tenants on holdover agreements, with an income based WALE of 2.1 years.
• Significant capital expenditure is projected and adopted within our analysis primarily in regards to base building upgrades of plant & equipment.
• Planning Proposal (PP-2021-2473) has been submitted (currently under Gateway determination with the Department of Planning with endorsement
from Willoughby Council) for a 33 storey commercial / retail development, extending to a total GFA of 60,524m² (being 57,457m² of commercial GFA
and 3,067m² of retail GFA) in conjunction with the adjoining site at 15 Help Street (separate owner & purchaser).
• Conditions of sale are that all outstanding incentives are to be adjusted in favour of the purchaser at settlement.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
241 O’RIORDAN STREET, MASCOT NSW
An 11-level A-grade office tower (completed 1992 and significantly refurbished in 2014/15 & 2017-2019) with basement car parking for
401 vehicles. The office tower comprises a ground level foyer with a cafe, various office areas, 10 upper levels of office accommodation
and a roof top plant room. The subject adjoins the Stamford Hotel and is a well recognised landmark building in South Sydney. Stratum
title (limited in height & depth) with a car park management plan between the subject and the Stamford Sydney Airport Hotel.
KEY DETAILS
Sale Date: April 2021
Sale Price: $151,500,000 (Gross Headline)
Vendor:
Purchaser: Sales Analysis Fort Street Capital
Savills Investment Management (Australia)
NABERS Rating: Energy: 5.5 Star Water: 4.0 Star
Land Area: 3,934.1m² (as per Deposited Plan at the Ground and Level 1 stratum)
NLA: Office 18,964.2m² (99.6%)
Café 78.2m² (0.4%)
Total 19,042.4m²
Parking: 401 spaces (1:48/m2)
Vacancy: 2.3% - (435.2m² 33 car spaces)
No of Tenants: 8 office tenants and a café tenant
Net Passing Income: Circa $9.8m
INPUTS ANALYSIS
Market Rentals: Office: $450/m - $485/m² net
2
Passing Initial Yield: 6.48%
Café: $1,809/m² gross (passing) Core Market Yield*: 5.94%
Avg Cmpd Mkt Growth: 3.24% gross (10 year) IRR (after costs): 5 yr 10 yr
Outgoings: $2,183,7333 ($114.68/m2) 5.09% 6.52%
Leasing/Incentive Downtime (10 yrs): 8 – 18 months @ 50% retention Rate/m² NLA: $7,956/m²
Allowances (office): Incentive (10 yrs): 25% - 35% net (28.3% 10 yr avg) Weighted Average Lease Income Area
Cap Adjustment Period: 36 months – capturing 82% NLA Expiry (Yrs): 2.4 yrs 2.4 yrs
Terminal Yield: 6.375% Average Running Yield: 10 yr
Capital Expenditure: Total Capex: $703/m2 (8.8% of value) (before capex) 6.63%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
#Analysis conducted inclusive of rental guarantee over vacant space.
Lease Expiry by Area Tenant Composition by Net Passing Income
16,000
36 mths; 82% NSW Govt (Transport NSW) -
14,000 NLA 39.8%
12,000 AbbVie - 16.1%
10,000
Coates Hire - 9.9%
8,000
6,000 Landis & Gyr - 10.8%
4,000
Lagardere - 9.1%
2,000
- Other - 14.2%
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• The building was sold via an “open-market” campaign in April 2021. The sales campaign was competitive, with bids received from a host of reputable
local, offshore and private funds.
• The property is 97.7% leased to 8 office tenants and a café tenant with an income based WALE of 2.4 years.
• Current vacancy of 2.3% (435.2m²) which comprises G.05 (99.3m²), S5.03 (355.9m²) and 33 car spaces.
• Major building tenant comprises Property NSW (Transport NSW) across levels Ground – Level 5 (44.7% of NLA or 8,506.8m²) expiring 31 December
2023 with a 1 x 5 year option period remaining (face market review on option with cap of 7% and collar of 3%). We have adopted a 36 month
imminent expiry window within our capitalisation calculations and accordingly, our resultant core market yield is considered risk adjusted for the
Property NSW expiry.
• Conditions of sale are that all outstanding incentives are to be adjusted in favour of the purchaser at settlement.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
LEVELS 4-17, 235-251 BOURKE STREET, MELBOURNE VIC
The property forms part of 235-251 Bourke Street, a strata-titled office building comprising a
ground floor retail arcade, basement car parking and 15 upper levels of office accommodation in
the Civic precinct of the Melbourne CBD. Situated to the southern side of Bourke Street
(in between Swanston and Russell Streets), the property is accessible via a main RMIT entrance
to Bourke Street. Improvements are a single strata lot comprising 14 levels of B-grade office
accommodation. The office accommodation presents in a varied condition ranging from a high
refurbished standard to dated and poor condition.
KEY DETAILS
Sale Date:
Sale Price:
Sales Analysis April 2021 (Settlement)**
$133,000,000
Vendor: RMIT
Purchaser: Futuro Capital
NABERS Rating: Exempt
Land Area: N/A
NLA: 23,014.0m²
Parking: N/A
Vacancy: 0.0%
No of Tenants: 1 office tenant.
Net Passing Income: Circa $8 million
INPUTS ANALYSIS
Market Rentals: Office Refurbished: Average $505/m net 2
Passing Initial Yield: 6.02%
Office Standard: Average $403/m2 net Core Market Yield*: 6.71%
Office Poor: Average $383/m2 net IRR (after costs): 5 yr 10 yr
Avg Cmpd Mkt Growth: 3.48% (10 year CAGR)^ 7.61% 7.47%
Outgoings: $2,598,575 ($113/m2) Rate/m² NLA: $5,779/m²
Office Leasing/Incentive Downtime (10 yrs): 12 months @ 50% retention. Weighted Average Lease Income Area
Allowances: Net Incentive (10 yrs): 25%-35% (average 31%). Expiry (Yrs): 5.00 5.00
Cap Adjustment Period: 24 months Average Running Yield: 5 yr 10 yr
Terminal Yield: 6.50% (before capex) 6.39% 5.80%
Capital Expenditure: Total Capex: $993/m2
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
**We note the contract was first entered into in October 2020 however due to the leaseback to RMIT commencing at settlement we have analysed the sale as at April 2021.
^10-year CAGR noted does not account for rental uplift applied in the cashflow due to high refurbishment allowances.
Lease Expiry by Area Tenant Composition by Gross Passing Income
NLA (m ²)
30,000
24 mths; 0% NLA
25,000
20,000
15,000
10,000
5,000
RMIT
0 100%
Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Initial Expiries Renewals Vacancy Expiry Capture Window
COMMENTS
• Contracts were exchanged in October 2020 following an international EOI campaign, with settlement/FIRB approval occurring in late April 2021.
• The property was marketed in the midst of Melbourne’s second lockdown with 10 parties shortlisted for the second round of bidding. Acquisition
valuation advice provided by C&W with intimate knowledge of sale campaign depth, however we do note there was minimal pricing spread between
the purchaser and underbidders. The depth of the campaign indicates the strong investor appetite for Melbourne’s office assets.
• The property transacted pursuant to a 5-year net effective rent leaseback to RMIT commencing at settlement date, which we have applied in our
analysis.
• We have made allowances in our analysis for the capital expenditure the purchaser intends to commit to the un-refurbished levels. This results in an
increase in our applied market rents upon completion of these works beyond the RMIT lease expiry.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
68 WATERLOO ROAD, MACQUARIE PARK NSW
A modern commercial complex comprising high clearance warehousing and two levels of basement parking for 237 cars (169 single
spaces & 68 tandem spaces), together with ground and four upper levels of B-grade standard office accommodation, balconies/terraces,
roof-top plant rooms, on-grade parking for 165 cars (130 secured & 35 unsecured) and landscaped grounds.
KEY DETAILS
Sale Date: March 2021
Sale Price: $106,500,000 (Gross Headline)
Vendor: AMP Capital & Sunsuper
Sales Analysis
Purchaser: Local Private Investor
NABERS Rating: Energy: 5.5 Star Water: 3.0 Star
Land Area: 14,844m²
NLA: Office 10,488.7m² (77.8%)
Warehouse 2,997.3m² (22.2%)
Total 13,486.0m²
Parking: 402 spaces (1:34/m2)
Vacancy: 0% - (37 car spaces vacant)
No of Tenants: 10 tenants
Net Passing Income: Circa $5.2m
INPUTS ANALYSIS
Market Rentals: Office: $370/m - $385/m² net ($380/m² net avg)
2
Passing Initial Yield: 4.85% (4.94% fully leased)
Warehouse: $190/m² net Core Market Yield*: 5.06%
Avg Cmpd Mkt Growth: 3.32% gross (10 year) IRR (after costs): 5 yr 10 yr
Outgoings: $1,432,030 ($106/m2) 5.31% 6.12%
Leasing/Incentive Downtime (10 yrs): 6 – 12 months @ 50% retention Rate/m² NLA: $7,897/m²
Allowances: Incentive (10 yrs): 22.5% - 30.0% net (24.0% avg) Weighted Average Lease Income Area
Cap Adjustment Period: 36 months – capturing 20% NLA Expiry (Yrs): 4.2 yrs 4.5 yrs
Terminal Yield: 5.375% Average Running Yield: 10 yr
Capital Expenditure: Total Capex: $327/m2 (4.14% of value) (before capex) 5.0%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
#Analysis conducted inclusive of rental guarantee over vacant space.
Lease Expiry by Area Tenant Composition by Net Passing Income
12,000
36 mths; 20%
NLA Sekisui House Australia Holdings
10,000
- 17.5%
8,000
Pitney Bowes Australia Ptd Ltd -
15.4%
6,000
Karl Storz Endoscopy Australia
4,000 Pty Ltd - 12.4%
2,000 Fletcher Building (Australia) -
13.2%
- Relationships Australia (NSW) -
11.4%
Other - 30.0%
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• The building was sold via an “open-market” campaign in March 2021. The sales campaign was competitive, with bids received from a host of
reputable local, offshore and private funds. This is reflected in the low “tight” sales metrics reflected above.
• The property transacted 100% leased (apart from 37 car spaces) with a WALE (income) of 4.2 years. There are no expires over the initial 24 months
of the cashflow and therefore the asset is considered insulated from the current extended leasing downtime and higher incentives as a result of
COVID-19. We understand the favourable tenancy profile was one of the driving factors for the strong demand during the sales campaign.
• Other positive investment considerations of note are the central and prominent Macquarie Park location, diversified income (office, warehouse &
parking) and the under rented office component (passing $356/m2 net avg) providing scope for positive rental reversion in the shorter term. Further,
the large land holding, two street frontage, B3 Commercial Core zoning and a potential 3.0:1 FSR (current FSR of approximately 1:1) & 65 metre
height limit under the Macquarie Park Corridor Precinct Incentives Scheme provide future longer term development upside.
• Major tenants include Pitney Bowes (part warehouse & S1.01 – 16.87% of NLA) expiring April 2024, Karl Storz Endoscopy Australia (Part warehouse
& G.01 – 18.37% of NLA) expiring October 2029, Sekisui House (G.01 – 14.59% NLA) expiring February 2026 & Fletcher Building (Level 4 – 11.40%
of NLA) expiring November 2023.
• Conditions of sale are that all outstanding incentives are to be adjusted in favour of the purchaser at settlement, whilst there is no rental guarantee
over the current vacant car spaces.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
1 BLIGH STREET, SYDNEY NSW
2011 completed 29-level Premium-grade office tower comprising four basement levels
(92 single cars), ground floor café and childcare tenancies, 27 upper office levels and a
mid-level wintergarden/external terrace together with plant rooms on levels 16 and
rooftop.
KEY DETAILS
Sale Date: March 2021
Sales Analysis
Sale Price: $375,000,000 (33.33% interest)
Vendor: Cbus Property
Purchaser: Mercatus Dexus Australia Partnership
NABERS Rating: Energy: 5.5 Star Water: 4.5 Star
Land Area: 3,317m 2
NLA: 45,513.4m2
Parking: 92 spaces
Vacancy: 0.1%
No of Tenants: 29 tenants – Major Tenant (Clayton Utz – 40.1% of NLA)
Net Passing Income: Circa $60.61 million (inclusive of rebates).
INPUTS ANALYSIS
Market Rentals: Office: Average $1,540/m pa gross
2
Passing Initial Yield: 5.42%
Average $1,275/m² pa net Core Market Yield*: 4.47%
Avg Cmpd Mkt Growth: 3.37% (10 year) 10 Yr IRR (after costs): 5.90%
Outgoings: $11.25 Mill ($265/m2) Rate/m² NLA: $26,462/m²
Leasing/Incentive Downtime (10 yrs): 6-15 months @ 50% retention Weighted Average Lease Income Area
Allowances: Incentive (10 yrs): 22.5%-27.5% (average 24.5%) Expiry (Yrs): 5.2 yrs 5.4 yrs
Cap Adjustment Period: 36 Months Average Running Yield: 5 yr 10 yr
Terminal Yield: 4.625% (Yr 11 Clayton Utz expiry captured) (before capex) 2.4% 4.0%
Capital Expenditure: Total Capex: Circa $870/m2 overall
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
COMMENTS
• A 33.33% interest in 1 Bligh Street was negotiated by Dexus who exercised their pre-emptive rights subsequent to an open market campaign undertaken
by Cushman & Wakefield.
• Core located Premium Grade asset currently 99.9% leased with a favourable income based WALE of 5.2 years.
• The tenancy profile is dominated by three main tenants being Clayton Utz (Levels 5-15), Papuan Oil Search (Levels 22-24) and the Commonwealth
Government (Levels 19-21). Collectively these tenants occupy 63.1% of NLA and generate 65.0% of passing income. The recently extended major lease
to Clayton Utz expires in June 2031, the Papuan Oil Search tenancy expires in September 2024 (Year 4) whilst the Commonwealth Government tenancy
expiries in February 2028 (Year 5).
• The elevated initial yield is primarily a function of the above market passing rental of major building tenant, Clayton Utz which reduces to a more market
based $1,200/m² net as at June 2021, at commencement of their 10 year lease extension which has resulted in a revised lease termination date of 9
June 2031.
• In the current reduced growth environment (and associated softer leasing market conditions) the metrics reflected by the sale indicate further downward
bias on IRR’s with the 5.90% demonstrated by this sale compared to the pre COVID-19 IRR range for Sydney CBD Premium grade assets of 6.125% to
6.375%.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
BINARY CENTRE, 3 RICHARDSON PLACE, NORTH RYDE NSW
The asset comprises two commercial buildings completed in 2001, known as Building 0 (9,860m²) & Building 1 (7,205.8m²) providing office
accommodation across Ground – Level 5 with three levels of basement car parking for 583 cars in addition to 50 on-grade spaces and
End of Trip facilities. A café tenancy (121.6m²) is provided between the two buildings with a 220m² communal gymnasium (excluded from
the Net Lettable Area) located on the Ground Floor of Building 1.
KEY DETAILS
Sale Date: March 2021
Sale Price: $115,000,000 (Gross Headline)
Vendor:
Purchaser:
Sales Analysis Goodman Group
Quintessential Equity
NABERS Rating: Energy: 4.5 Star
Land Area: 17,920m²
NLA: Building 0 9,860.0m² (57.37%)
Building 1 7,205.8m² (41.92%)
Café 121.6m² (0.71%)
Total 17,187.4m²
Parking: 633 spaces (1:27/m ) 2
Vacancy: 0% - (Suite 1.03 -111.5m²)
No of Tenants: 17 office tenants and 1 café tenant
Net Passing Income: Circa $7.6m
INPUTS ANALYSIS
Market Rentals: Office: $340 - $350/m net 2
($347/m² net avg) Passing Initial Yield: 6.58%
Parking: $225 pcpm (average) Core Market Yield*: 6.17%
Avg Cmpd Mkt Growth: 3.2% (10 year) gross IRR (after costs): 5 yr 10 yr
Outgoings: $1,708,740 ($99/m ) 2
4.70% 6.56%
Leasing/Incentive Downtime (10 yrs): 6 – 18 months @ 50% retention Rate/m² NLA: $6,691/m²
Allowances: Incentive (10 yrs): 26.4% net (average) Weighted Average Lease Income Area
Cap Adjustment Period: 24 months – 52% of NLA Expiry (Yrs): 3.0 yrs 2.9 yrs
Terminal Yield: 6.50% Average Running Yield: 10 yr
Capital Expenditure: Total Capex: $584/m2 (8.72% of value) (before capex) 6.0%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
#Analysis conducted inclusive of rental guarantee over vacant space.
Lease Expiry by Area Tenant Composition by Gross Passing Income
12,000
10,000 Council of the City of Ryde -
24 mths; 52% NLA 30.5%
8,000 NTT Australia Pty Ltd - 28.2%
6,000
Pronto Software Ltd - 8.6%
4,000
Rexel Electrical Supplies Pty
2,000 Ltd - 7.9%
Liquor Marketing Group Ltd -
- 4.2%
Curren t Yea r 1 Yea r 2 Yea r 3 Yea r 4 Yea r 5 Yea r 6 Yea r 7 Yea r 8 Yea r 9 Yea r 1 0Yea r 1 1Yea r 1 2Yea r 1 3
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• The building was sold via an “off-market” campaign in early 2021.
• It sold 99.4% leased (current vacancy of 111.5m²) reflecting an income based WALE of 3.0 yrs.
• Building 0 is fully leased to two tenants being Council of the City of Ryde (5,069.1m² or 29.5%) expiring April 2026 and NTT Australia (4,790.9m² or
27.9%) expiring November 2021.
• Building 1 is leased multi-tenanted (15 tenants and 1 vacancy) and is occupied on a whole and part floor basis with tenancies ranging from 105m² -
1,326.6m².
• The conditions of the sale are that all outstanding incentives will be adjusted in favour of the purchaser at settlement with no rental guarantee over
the current vacancy.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
226 FLINDERS LANE, MELBOURNE VIC
The property is located in the Civic precinct in the Melbourne CBD situated to the northern side
of Flinders Lane. The property is directly opposite what will be an entrance to the new Town Hall
Station which is currently under construction. Improvements comprise an historic 7-level office
building previously configured as a police station over Basement and Ground to Level 2 with
hostel accommodation across Levels 3 to 6 with rooftop access. The building presents in
relatively poor condition.
KEY DETAILS
Sale Date:
Sale Price:
Vendor:
Sales Analysis March 2021
$37,000,000
Swinburne University
Purchaser: Fidinam Group
NABERS Rating: Unrated.
Land Area: 3,042m²
NLA: 4,220m²
Parking: 0 spaces
Vacancy: 100%
No of Tenants: N/A
Net Passing Income: N/A
INPUTS ANALYSIS
Market Rentals: Office: Average $588/m net 2
Passing Initial Yield: 0.00%
Retail: Average $516/m2 net Core Market Yield*: 4.46%
Avg Cmpd Mkt Growth: 3.39% (10 year CAGR) IRR (after costs): 5 yr 10 yr
Outgoings: $612,539 ($145/m2) 4.51% 5.72%
Office Leasing/Incentive Downtime (10 yrs): 9-18 months @ 50% retention. Rate/m² NLA: $8,768/m²
Allowances: Net Incentive (10 yrs): 20%-35% (average 25%). Weighted Average Lease Income Area
Cap Adjustment Period: 24 months Expiry (Yrs): 0.00 0.00
Terminal Yield: 4.50% Average Running Yield: 5 yr 10 yr
Capital Expenditure: Total Capex: $2,633/m 2
(before capex) 2.89% 3.59%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area Space Composition by Net Lettable Area
NLA (m ²) Lease Expiry by Area
6,000
24 mths; 100%
5,000 NLA Retail
23%
4,000
3,000
2,000
1,000 Office
77%
0
Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Initial Expiries Renewals Vacancy Expiry Capture Window
COMMENTS
• The property transacted following an Expressions of Interest campaign with contracts exchanged in March 2021.
• The property was marketed following Melbourne’s stage 4 lockdown and the purchaser is a Swiss entity continuing the trend seen throughout 2020 of
strong international interest in Australian real estate.
• We understand the purchaser was the underbidder however was more flexible on settlement terms.
• The purchaser intends to commit to a significant capital expenditure program including a strip back to base building condition, an addition of up to two
levels, new end of trip facilities, ground floor retail accommodation and service upgrades. The works are estimated at circa $12m over a two-year
period.
• We have applied a significant capital expenditure budget in line with the purchaser’s strategy to reposition the asset. We have adopted an 18 month
downtime period in the cashflow allowing for the completion of these works before market rents are achieved.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation
545 QUEEN STREET, BRISBANE QLD
A modern office building that provides a total NLA of approximately 13,363m² as currently
configured. Office accommodation is provided across Lower Ground, part of the Ground
Floor and 9 upper office levels (4 podium level, 5 tower levels). Typical floorplates for
tower levels are circa 750m² and circa 2,140m² for the podium levels. There is a café
tenancy at Ground Level. Improvements were originally constructed circa 1982 and
underwent a major redevelopment in 2007/08 (including substantial extension of the
podium level floorplates) to present as a modern high-quality office building.
KEY DETAILS
Sale Date:
Sale Price: Sales Analysis March 2021
$117,500,000
Vendor: Axis Capital
Purchaser: Cromwell Property Group (Cromwell Direct Property Fund)
NABERS Rating: Energy: 5.0 Stars Water: Unrated
Land Area: 2,735m²
NLA: 13,363m²
Parking: 91 spaces (1 bay:147m² of NLA)
Vacancy: Nil - Fully Leased (inclusive of Vendor Rent Guarantees)
Major Tenants: Sonic Healthcare, Calibre Professional Services & CSG International
Net Passing Income: Circa $6,980,000
INPUTS ANALYSIS
Market Rentals: Office: $646/m² gross (average p.a.) Passing Initial Yield1: 5.94%
Cafe: $3,110/m² gross p.a. Passing Initial Yield2: N/A – Incentives “Paid Out” Basis
Avg Cmpd Mkt Growth: 2.94% (10 year - gross office) Equivalent Initial Yield3: 5.95%
Outgoings: $2,104,604 ($157/m² of NLA) Core Market Yield4: 6.02%
Leasing/Incentive Downtime (10 yrs): 9 mths @ 50% retention IRR (after costs): 5 yr 10 yr
Allowances (Office): Incentive (10 yrs): 18.8%-37.5% 4.73% 6.13%
Cap Adjustment Period: 24 mths (capturing 11% of NLA) Rate/m² NLA: $8,793/m²
Terminal Yield: 6.25% (24 mths capturing 40% of NLA) Weighted Average Lease Income Area
Capital Expenditure: Cashflow (1-10 Yr): $5,591,041 ($418/m²) Expiry (Yrs): 4.22 yrs 4.33 yrs
Terminal Yr: $450,888 ($34/m²) Average Running Yield: 5 yr 10 yr
Total Capex: $6,041,930 ($452/m²) (before capex) 6.20% 6.15%
1
Passing Initial Yield = net passing income divided by the sale price. 2Passing Initial Yield (after abatements) = net passing income less annualised rent free and abatement incentives, divided by the sale price.
3
Equivalent Initial Yield = net passing income over the sale price less total capital value / “below the line” adjustments. 4Core Market Yield = assessed fully leased net market income divided by the sale price
which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area Tenant Composition by Gross Passing Income
COMMENTS
• Sold following a targeted “on-market” expressions of interest campaign, contracting in March 2021 and settling in May 2021.
• Purchased by Cromwell Property Group on behalf of the Cromwell Direct Property Fund
• Major tenants comprise Sonic Healthcare (19.7% of NLA), Calibre Professional Services (16.0% of NLA), CSG International (15.1% of NLA) and
Department of Defence (11.8% of NLA).
• We understand all outstanding incentives were “paid out” by the Vendor at settlement and accordingly our analysis has been undertaken on this basis.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation227 ANZAC PARADE, KENSINGTON NSW (Leasehold interest)
Leasehold interest with 84.8 years remaining (January 2106 expiry). The complex comprises a purpose built (2005) educational facility
consisting of 2 office buildings being a six-level office building fronting Anzac Parade, a 3-Level tower to the rear fronting Houston Lane,
a central courtyard, and ground and lower ground classroom areas extending beneath the office buildings and courtyard. 4 on-site car
spaces are provided in addition to 56 off-site spaces within the nearby UNSW Barker St carpark (income not derived from these).
KEY DETAILS
Sale Date: March 2021
Sale Price: $80,150,000 (Gross Headline)
Vendor:
Purchaser:
Sales Analysis Blackwattle International
Charter Hall
NABERS Rating: N/A
Land Area: 2,453m²
NLA: 10,685.4m²
Parking: 4 car spaces (plus 56 dedicated off-site spaces)
Vacancy: Nil
No of Tenants: Fully leased to University of NSW (UNSW)
Net Passing Income: Circa $3.7m
INPUTS ANALYSIS
Market Rentals: Office: $400/m net ($348/m² net passing)
2
Passing Initial Yield: 4.63%
Avg Cmpd Mkt Growth: 3.24% (10 year) Core Market Yield*: 5.05%
Outgoings: $85/m² - C&W estimated IRR (after costs): 5 yr 10 yr
Leasing/Incentive Downtime (10 yrs): 12 months @ 65% retention 6.8% 6.0%
Allowances: Incentive (10 yrs): 25% gross Rate/m² NLA: $7,501/m²
Cap Adjustment Period: 12 months Weighted Average Lease Income Area
Terminal Yield: 5.00% Expiry (Yrs): 10.8 yrs 10.8 yrs
Capital Expenditure: Total Capex: $354/m2 (4.7% of value) Average Running Yield: 10 yr
(before capex) 4.6%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
#Analysis conducted inclusive of rental guarantee over vacant space.
Lease Expiry by Area Tenant Composition by Gross Passing Income
14,000
12 mths; 0% NLA
12,000
10,000
8,000
6,000
4,000 UNSW - 100.0%
2,000
-
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• Leasehold interest with University of New South Wales (UNSW) being the Lessor expiring January 2106 (84.8 years remaining) and redevelopment
rights under the ground lease (while UNSW is not the occupant).
• The building was sold via an “off-market” campaign in early 2021.
• It sold 100% leased to UNSW under a long term, triple net lease (i.e. no exposure to outgoings, structural repairs or upgrades of plant), expiring January
2032 (with 2 x 10 year option periods) with a remaining lease term of 10.8 years and subject to fixed 3.0% increases.
• The property is considered to be under-rented with the current passing rent of $348/m² net below our assessment of market ($400/m² net), however
any ability to obtain positive rental reversions is delayed until lease expiry (January 2032).
• At lease expiry, we have assumed 12 months leasing downtime @ 65% renewal probability and a 10 year lease term (first option period), $300/m²
make good / refurbishment allowance and 25% gross incentive. Whilst a greater spread between the resultant initial yield and terminal may be justified
as a result of the diminishing remaining ground-lease term, our terminal yield of 5.125% is based off a +10 year WALE with leasing downtime, incentive
and capex allowances accounted for.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation310 ANN STREET, BRISBANE QLD
Modern office building that provides a total NLA of approximately 18,362m². Office
accommodation is provided across Level 4 to Level 18 inclusive in addition to smaller
office tenancies and two café tenancies to the Ground and Mezzanine Levels. The
property provides parking for 84 cars across 3 podium levels which are accessed via
Wickham Terrace. Improvements were completed circa 1993 and were significantly
redeveloped in 2017/18 to provide modern A-Grade office accommodation.
KEY DETAILS
Sales Analysis
Sale Date: March 2021
Sale Price: $210,000,000
Vendor: 310 Ann Street Nominees Pty Ltd as Trustee (Cornerstone)
Purchaser: AM 310 Ann Street Investment Pty Ltd as Trustee (Ashe Morgan)
NABERS Rating: Energy: 5.5 Stars Water: Unrated
Land Area: 2,256m² (freehold only) / 2,776m² (incl. volumetric leasehold lot)
NLA: 18,362m²
Parking: 84 spaces (1 bay:219m² of NLA)
Vacancy: Nil - Fully Leased
Major Tenants: State of Queensland and AWP Australia (subsidiary of Allianz)
Net Passing Income: Circa $11,500,000
INPUTS ANALYSIS
Market Rentals: Office: $713/m² gross (average p.a.) Passing Initial Yield1: 5.48%
Retail: $702/m² gross (average p.a.) Passing Initial Yield2: N/A – Incentives “Paid Out” Basis
Avg Cmpd Mkt Growth: 2.89% (10 year - gross office) Equivalent Initial Yield3: 5.61%
Outgoings: $2,221,665 ($121/m² of NLA) Core Market Yield4: 5.54%
Leasing/Incentive Downtime (10 yrs): 12 mths @ 50% retention IRR (after costs): 5 yr 10 yr
Allowances (Office): Incentive (10 yrs): 17.5%-40.0% 6.00% 6.34%
Cap Adjustment Period: 24 mths (noting no short-term expiries captured) Rate/m² NLA: $11,437/m²
Terminal Yield: 6.00% (24 mths capturing 1% of NLA) Weighted Average Lease Income Area
Capital Expenditure: Cashflow (1-10 Yr): $5,194,333 ($283/m²) Expiry (Yrs): 7.45 yrs 7.47 yrs
Terminal Yr: $32,935 ($2/m²) Average Running Yield: 5 yr 10 yr
Total Capex: $5,227,268 ($285/m²) (before capex) 5.99% 5.88%
1
Passing Initial Yield = net passing income divided by the sale price. 2Passing Initial Yield (after abatements) = net passing income less annualised rent free and abatement incentives, divided by the sale price.
3
Equivalent Initial Yield = net passing income over the sale price less total capital value / “below the line” adjustments. 4Core Market Yield = assessed fully leased net market income divided by the sale price
which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area Tenant Composition by Gross Passing Income
COMMENTS
• Sold following a formal “on-market” expressions of interest campaign, settling in March 2021.
• Sold fully leased (inclusive of vendor rental guarantees over 6.3% of NLA) with a WALE of 7.47 years by gross income.
• Major tenants are the State of Queensland (46.0% of NLA) and AWP Australia which is a wholly owned subsidiary of Allianz (43.5% of NLA).
• We understand all outstanding incentives were “paid out” by the Vendor at settlement and accordingly our analysis has been undertaken on this basis.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation10 EAGLE STREET, BRISBANE QLD
A 32-level office building (exclusive of 3 basement levels) that provides a total lettable
area of 27,785m² across a Ground Level, Mezzanine Level and 30 upper levels.
Improvements were completed in 1978 and have been subsequently refurbished to
provide A-Grade office accommodation (noting major works in 1989, 2013 and more
recently in 2021). The property has achieved a 5 Star NABERS Energy Rating. The
property is located to the centre of the Golden Triangle precinct and comprises an “island
site” of 3,477m² bound by Eagle Street, Charlotte Street, Market Street and Mary Street.
KEY DETAILS
Sale Date:
Sale Price: Sales Analysis February 2021
$285,000,000
Vendor: Dexus Office Partnership
Purchaser: Marquette Properties
NABERS Rating: Energy: 5.0 Stars Water: 4.0 Stars
Land Area: 3,477m²
NLA: 27,785m²
Parking: 245 spaces (1 bay:113m² of NLA)
Vacancy: Nil - Fully Leased (inclusive of Vendor Rent Guarantees)
Major Tenants: AEMO, Wilson Parking and Ord Minnett
Net Passing Income: Circa $18,640,000
INPUTS ANALYSIS
Market Rentals: Office: $758/m² gross (average p.a.) Passing Initial Yield1: 6.54%
Cafe: $887/m² gross p.a. Passing Initial Yield2: N/A – Incentives “Paid Out” Basis
Avg Cmpd Mkt Growth: 2.97% (10 year - gross office) Equivalent Initial Yield3: 5.98%
Outgoings: $4,960,027 ($179/m² of NLA) Core Market Yield4: 5.79%
Leasing/Incentive Downtime (10 yrs): 9 mths @ 50% retention IRR (after costs): 5 yr 10 yr
Allowances (Office): Incentive (10 yrs): 17.5%-40.0% 4.48% 6.25%
Cap Adjustment Period: 36 mths (capturing 55% of NLA) Rate/m² NLA: $10,257/m²
Terminal Yield: 6.00% (24 mths capturing 39% of NLA) Weighted Average Lease Income Area
Capital Expenditure: Cashflow (1-10 Yr): $12,416,682 ($447/m²) Expiry (Yrs): 3.08 yrs 3.14 yrs
Terminal Yr: $1,527,121 ($55/m²) Average Running Yield: 5 yr 10 yr
Total Capex: $13,943,803 ($502/m²) (before capex) 6.49% 6.17%
1
Passing Initial Yield = net passing income divided by the sale price. 2Passing Initial Yield (after abatements) = net passing income less annualised rent free and abatement incentives, divided by the sale price.
3
Equivalent Initial Yield = net passing income over the sale price less total capital value / “below the line” adjustments. 4Core Market Yield = assessed fully leased net market income divided by the sale price
which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area Tenant Composition by Gross Passing Income
COMMENTS
• Sold with occupancy of 91.4% (vendor rental guarantees provided over vacancies – 8.6% of NLA) with a WALE of 3.08 years by gross income.
• A formal "on-market" expressions of interest campaign was conducted by Knight Frank and Savills.
• Separate to the tower is a detached two-level building that is located to the southern boundary alignment and renders a degree of future redevelopment
potential (estimated developable site area of circa 900m²). We highlight that we have not allocated a separate land value for potential "development
upside" of this property component within our analysis.
• We understand all outstanding incentives were “paid out” by the Vendor at settlement and accordingly our analysis has been undertaken on the “gross
price” basis.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation60 CARRINGTON STREET, SYDNEY NSW (50% Interest)
The subject comprises an upper B-grade commercial office building constructed in 1971
and progressively refurbished, most recently in 2016. Accommodation comprises ground
& lower ground level retail component (4 tenancies) fronting Carrington Street and
Wynyard Street, ground level lobby, 16 upper levels of office accommodation and
basement parking for 22 vehicles.
KEY DETAILS
Sale Date: January 2021
Sale Price:
Vendor: Sales Analysis $140,000,000 (50% interest)
Brookfield Property Partners
Purchaser: Marprop
NABERS Rating: Energy: 5.0 Star Water: 4.0 Star
Land Area: 1,441m²
NLA: 14,631.3m²
Parking: 22 single spaces
Vacancy: Vacancy limited to 4 car spaces
No of Tenants: 22 office & 4 retail tenants
Net Passing Income: Circa $13.67 million
INPUTS ANALYSIS
Market Rentals: Office Avg: $1,117/m2 pa gross ($937/m2 pa net) Passing Initial Yield: 4.88%
Retail Avg: $2,148/m pa gross ($1,969/m pa net)
2 2
Core Market Yield*: 4.89%
Avg Cmpd Mkt Growth: 3.38% (Office 10 year) IRR (after costs): 5 yr 10 yr
Outgoings: $2,626,731 ($179/m2) 4.46% 5.86%
Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention* Rate/m² NLA: $19,137/m²
Allowances: Incentive (10 yrs): 22.5%-32% (average 26.2%) Weighted Average Lease Income Area
Cap Adjustment Period: 24 months (36% of NLA) Expiry (Yrs): 3.8 yrs 3.6 yrs
Terminal Yield: 5.125% Average Running Yield: 10 yr
Capital Expenditure: Total 10 yr Capex: $775/m2 (4.1% of MV) (before capex) 5.46%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
COMMENTS
• ‘Off Market’ transaction co-ordinated by Cushman & Wakefield with terms advised to have been negotiated directly between the vendor and purchaser.
• Upper B grade office tower located within the Western Precinct of the Sydney CBD,
• Currently fully leased.
• Active, multi tenanted income profile with income based WALE of 3.8 years.
• Expiries over Years 1-2 have been captured within our capitalisation approach with no major expiry to any one tenant.
• We are advised that all outstanding incentives (circa $4.5 Million) were covered by the Vendor and the above analysis reflects this.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation1 FARRER PLACE, SYDNEY NSW
Two landmark, Premium-grade, office towers, one of 64 levels (Governor Phillip Tower),
the other 42 levels (Governor Macquarie Tower), completed in 1994 together with
basement car parking (654 spaces), loading docks and five renovated historic
commercial terraces along Phillip Street.
KEY DETAILS
Sale Date: December 2020
Sale Price: $584,600,000 (25% interest)
Vendor:
Purchaser:
Sales Analysis GPT
APPF Commercial (Lendlease)
NABERS Rating: Energy: 5.0 Star Water: 3.0 Star
Land Area: 5,456m²
NLA: 85,333.7m²
Parking: 654 spaces
Vacancy: 1.5% of NLA
Major Tenants: KWM, Goldman Sachs, BOAML, Minter Ellison, NIB
Net Passing Income: Circa $104.87 million
Net Market Income: Circa $119.25 million
INPUTS ANALYSIS
Market Rents (Office): GMT - $1,160/m2 pa net (average) Passing Initial Yield: 4.48%
GPT - $1,390/m2 pa net (average) Core Market Yield*: 4.55%
Avg Cmpd Mkt Growth: 3.32% (10 year) - Office IRR (after costs): 5 yr 10 yr
Outgoings: $21,855,985 ($256.12/m2) ex cleaning recoveries 4.62% 6.10%
Leasing/Incentive Downtime (10 yrs): 6-15 months @ 50% retention Rate/m² NLA: $27,403/m²
Allowances: Incentive (10 yrs): 22.5%-30% (average 26.3%) WALE (Yrs): Income Area
Cap Adjustment Period: 48-60 months GPT 4.33 yrs 4.30 yrs
Terminal Yield: 4.75% GMT 4.22 yrs 4.75 yrs
Capital Expenditure: Total Capex Allowances (10 yrs): $1,187/m2 Combined 4.25 yrs 4.40 yrs
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area (Combined) Tenant Composition by Passing Income
NLA (m ²)
25,000
20,000
GPT, 64.7%
15,000
10,000 Carpark, 6.4%
Terraces, 0.6%
5,000
0 GMT, 28.3%
Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Initial Expiries Renewals Vacancy
COMMENTS
• Premium grade asset being one of the most prominent landmark office assets within Australia and comprising two office towers (Governor Phillip
Tower and Governor Macquarie Tower, large commercial carpark and historic terraces along Phillip Street).
• APPF Commercial (existing 25% interest owner) purchased GPT’s 25% interest via pre-emptive rights.
• Circa 61% of the Governor Macquarie Tower is leased on a whole or contiguous floor basis with circa 38% leased on a subdivided floor basis and
provides a WALE of 4.2 years (by income) with current vacancy limited to a single suite or 0.9% of NLA (272m2). The expiry profile is relatively
balanced (between 2.7% to 13.6% of NLA) with the largest expiry peak occurring Year 8 (32% of NLA) when major tenant Minter Ellison lease expiry
occurs.
• Circa 68% of Governor Phillip Tower is leased on a whole or contiguous floor basis with circa 32% leased on a subdivided floor basis and provides a
WALE of 4.3 years (by income) with current vacancy limited to several smaller suites or 1.8% of NLA (976m2). The expiry profile is relatively balanced
with the largest expiry exposure occurring in Year 6 (26.9% of NLA) when the KWM expiry occurs (19.5% of NLA). The recent renewal of Goldman
Sachs until 2031 has improved the WALE.
• Overall, this transaction provides further support for pricing for ‘Prime’ assets with quality tenant covenants and a tightening bias on IRR’s under the
current lower rental growth environment.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation400 GEORGE STREET, SYDNEY NSW
A landmark A-grade retail/office tower complex completed in 1998 and comprising 29
office levels and entry foyer off George Street, lower ground, ground and first floor prime
retail arcade (Sydney Arcade) extending from the Pitt Street Mall to George/King Street,
and 91 basement parking spaces The office tower is primarily leased to Telstra with the
retail incorporating tenants such as Hugo Boss, JD Sports, Woolworths and Hyundai
and provides a WALE of 5.8 years.
KEY DETAILS
Sale Date:
Sale Price:
Vendor:
Sales Analysis December 2020
$290,000,000 (25% interest – headline price)
ICPF
Purchaser: M & G Real Estate
NABERS Rating: Energy: 4.5 Star Water: 4.0 Star
Land Area: 4,698m²
NLA: Office: 45,558.4m² Retail: 5,502.5m2 Total: 51,060.9m2
Parking: 91 spaces
Vacancy: 1.3% (Retail - 644.0m2)
Major Tenants: Telstra (89.5% of NLA), Hyundai, Woolworths, JD Sports Fashion.
Net Passing Income: Circa $54.25 million
INPUTS ANALYSIS
Market Rentals: Office: $1,215/m pa gross ($1,030/m net)
2 2
Passing Initial Yield: 4.63%
Retail: $3,300/m2 pa gross Core Market Yield*: 4.62% (refer comments below)
Avg Cmpd Mkt Growth: Office: 3.32 %, Retail: 2.62% (10 year CAGR) IRR (after costs): 5 yr 10 yr
Outgoings: $9,489,714 ($185.85/m2) 3.91% 6.04%
Leasing/Incentive Downtime (10 yrs): 12-18 months @ 50% retention Rate/m² NLA: $22,718/m²
Allowances (Office): Incentive (10 yrs): 25%-30% (average 25.8%) WALE: Income Area
Cap Adjustment Period: 60 mths (capturing 65% of NLA - refer comments below) 5.7yrs 5.7 yrs
Terminal Yield: 5.00% (12 mth adjustment period) Average Running Yield (10 yr): 5.2% (before Capex)
Capital Expenditure: 10 Year Total Capex: $1,054/m 2
3.8% (after Capex)
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for
property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
Lease Expiry by Area Tenant Composition by Net Passing Income
40,000 60 mths; 65%
NLA
35,000
30,000
25,000
20,000
15,000
10,000
5,000
-
Vacancy Initi al E xpi ries Renewals Expiry Cap tur e Wind ow
COMMENTS
• A 25% interest purchased by existing 25% interest owner, M & G Real Estate, at a headline price of $290,000,000 following an open marketing
campaign. We understand final price adjustments were in the order of $2.75 million and related to committed capital works and remaining Telstra
incentive. Our analysis is based on the headline pricing.
• Diversified income profile with 62.3% of the passing income generated from the office component and 21.9% from the retail arcade and provides a
WALE (by income) of 5.8 years.
• Major building tenant Telstra occupy the majority of the office tower with lease expiries as at January 2025 (29,297.5m2) and March 2030
(15,553.1m2). Telstra also occupy a large retail area to the corner of George Street and King Street along with other major retailers comprising
Hyundai (Genesis Motors), JD Sports, Hugo Boss and a lower ground level Woolworths store.
• Provides strong rental reversion opportunities over the office levels (accounted for in our analysis).
• We note that our capitalisation calculations and resultant core market yield account for the Telstra expiry in 2025 (57% of NLA) at 50% retention. The
resultant market yield if this expiry is not accounted for is closer to 5.0%.
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards LegislationDynons Plaza, 919 Hay Street, Perth WA
Improvements comprise a modern 14-storey, A-grade office building completed in 2010 and three adjoining heritage listed properties
providing retail accommodation.
The building features three ground floor restaurant & retail tenancies including Hugo Boss, Tony Roma's and Seafood & Steaks,
basement parking inclusive of 78 car bays and end of trip facilities, 12 further levels of accommodation providing 13,360 square metres of
office space, floor plates of approx. 1,070 square metres, extensive glazing providing good natural lighting to tenancies and a 5.0-star
NABERS Energy rating and 4.5 star Water rating. The property benefits from refurbished open plan floors, refurbished end of trip and a
refurbished lobby.
The 13,360 square metre modern office component was 100% vacant at date of sale, with only the retail & heritage accommodation
tenancies leased. We understand the purchaser had allocated $5m for ACP rectification works essentially increasing the purchase price
Sales Analysis
of the building to $72.8m ($4,857 per square metre).
KEY DETAILS
Sale Date: December 2020
Sale Price: $67,800,000 (GST exclusive)
Vendor: Stamford Land Corporation Limited
Purchaser: Redhill Partners
Land Area: 3,227m²
NLA: 14,989m²
Parking: 34 spaces ( space per 393m2 of NLA)
Occupancy Rate: 5.5%
No of Tenants: 3
Net Passing Income: -$1,619,433 per annum
INPUTS ANALYSIS
Market Rentals (Avg): Office: $504/m 2
Passing Initial Yield: -2.39%
Avg Cmpd Mkt Growth: 2.54% (combined 10 year avg - Specs) Core Market Yield*: 7.50%
Leasing/Incentive Letting Up: 18 months @ 50% retention IRR (after costs): 5 yr 10 yr
Allowances: Incentive: 45% net 4.68% 7.48%
Cap Adjustment Period: 24 months - expiries Rate/m² NLA: $4,523/m²
Terminal Yield: 7.75% WALE: Income Area
Capital Expenditure $6,000,000 over 24 month period 0.23 yrs 0.32 yrs
Immediate:
Capital Expenditure $20/m2 ($299,789 per annum) Average Running Yield: 5 yr 10 yr
Ongoing: (before capex) 7.91% 7.68%
*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific
issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).
The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may
be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards LegislationYou can also read
