City property sold to Coast investors

Published on: 04/08/2020

A fully-leased commercial property with government and medical tenants in Townsville has sold to Gold Coast based investors for $5 million.

Burgess Rawson selling agent Doug Doyle said the building, at 281-285 Ross River Road, sold to private investment fund through an unconditional offer which was accepted before it was due to go to auction in Melbourne.

The property had been on the market for two years before Burgess Rawson took it through an auction campaign and got the results, he said.

“Probably the reach of our database, essentially, got the results,” Mr Doyle said. The sale price showed a relatively high return of 9.19 per cent.

A weighted average lease expiry of 3.7 years was a factor in the high yield.

Mr Doyle said Townsville was a strong market with a local council which supported a lot of growth and development.

“Townsville has got a lot going for it. The local economy is quite diverse. There’s a lot of industry and mining which makes it thrive,” Mr Doyle said.

“It just means the economy for Townsville is quite strong. It is a major hub for North Queensland and is the unofficial capital.”

The Aitkenvale property is a well-designed, modern building constructed in 2006 with net lettable area of 1,624 sqm and 4 star NABERS energy rating.

It is on a large 2,428 sqm site with 45 undercover and open air car parks and is close to Townsville’s premier Stockland Shopping Centre.

The building is occupied by longstanding tenants including Fortune 500 insurance broker Arthur J Gallagher, Mater Health Services, Queensland Government and Queensland Plastic Surgery with fixed annual increases of up to 3 per cent.

“These are highly reliable, secure tenancies within essential service industries, with the prospective buyer set to benefit from fixed increases in addition to the annual net income of $459,548 pa plus GST,” Mr Doyle said.

“While some asset classes were heavily impacted by COVID-19 we have seen significant investor interest in essential service tenanted assets post-pandemic.”

Burgess Rawson is due to take another Townsville property to auction in Sydney next month.

A service station leased to Viva Energy with net lease payments of $230,000 a year at 344-348 Ingham Road, Garbutt is due to go to auction on August 4.

Written by Tony Raggatt, Townsville Bulletin

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