• Thu. Feb 22nd, 2024

    Barwon Investment Partners Sells South Brisbane Office at a Premium

    ByEmma Wolukau-Wanambwa

    Jan 29, 2024
    Barwon Investment Partners Sells South Brisbane Office at a Premium

    Barwon Investment Partners has recently sold an under-utilized office building in South Brisbane at a significant premium. The three-level property, located at 55 Russell Street, was purchased by the fund manager for $34.7 million in October 2021. The sale price of $38.6 million represents a nine percent premium on the original investment.

    The property, which is backed by essential services, boasts a prime location on the corner of Edmonstone and is diagonally adjacent to Musgrave Park. Despite its short weighted average lease expiry of just 1.75 years, the building achieved an impressive 4.8 percent yield. This yield is even more notable considering the low vacancy rate of only 67 percent.

    Barwon Investment Partners had undertaken a refurbishment of the property, resulting in a 6-star NABERS rating. This increased the desirability of the office space and likely contributed to the higher sale price. The building is fully leased to three state government departments, including Queensland Health, providing a stable income stream for the new owner.

    The sale of 55 Russell Street is particularly significant as it marks the first major transaction since local planning changes increased density in the area. The 2,153 square meter Principal Centre zoned block now has the potential to accommodate a 30-story tower, up from the original 12 stories.

    Barwon Investment Partners cited its current focus on reviewing other compelling investment opportunities in the market as the reason for the sale. The fund manager is looking to reinvest capital in opportunities that align more closely with its healthcare strategy. Despite challenging capital market conditions, this sale demonstrates the strong demand from private investors for well-located properties with resilient investment fundamentals.

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    FAQ:

    1. What property did Barwon Investment Partners recently sell in South Brisbane?
    Barwon Investment Partners recently sold an under-utilized office building located at 55 Russell Street in South Brisbane.

    2. How much did Barwon Investment Partners purchase the property for?
    Barwon Investment Partners purchased the property for $34.7 million in October 2021.

    3. What was the sale price of the property?
    The sale price of the property was $38.6 million, representing a nine percent premium on the original investment.

    4. What is the current yield of the building?
    The building achieved an impressive 4.8 percent yield.

    5. What is the vacancy rate of the building?
    The building has a low vacancy rate of only 67 percent.

    6. What rating did the property receive after its refurbishment?
    The property received a 6-star NABERS rating after its refurbishment.

    7. Who are the current tenants of the building?
    The building is fully leased to three state government departments, including Queensland Health.

    8. What is the significance of the sale of 55 Russell Street?
    The sale of 55 Russell Street is significant as it marks the first major transaction since local planning changes increased density in the area. The property now has the potential to accommodate a 30-story tower.

    9. Why did Barwon Investment Partners sell the property?
    Barwon Investment Partners cited their current focus on reviewing other compelling investment opportunities in the market as the reason for the sale. They are looking to reinvest capital in opportunities that align more closely with their healthcare strategy.

    10. What does this sale demonstrate?
    This sale demonstrates the strong demand from private investors for well-located properties with resilient investment fundamentals.

    Key Terms/Jargon:
    – Yield: The income generated from an investment, usually expressed as a percentage of the total investment.
    – Vacancy rate: The percentage of unoccupied rental units in a property or market.
    – NABERS rating: A rating system used in Australia to measure and compare the environmental performance of buildings.
    – Capital market: The market in which long-term financial instruments such as stocks and bonds are traded.
    – Principal Centre zoned block: A property area designated for high-density development.

    Suggested Related Links:
    Barwon Investment Partners
    Queensland Health