Quanta Invest snaps up rare inner city opportunity in the inner west
Leaseback seals deal. Quanta Invest has paid $21m for the two buildings at 23 Graham St, Milton, which is the local headquarters of ADCO Constructions.
The local head office of one of Australia’s largest privately-owned construction companies in Brisbane’s inner west has been snapped up by a fund manager with a leaseback deal in place.
Quanta Invest paid $21m for the two buildings at 23 Graham St, Milton, in a deal struck by Knight Frank’s Christian Sandstrom and Blake Goddard on behalf of RJH Holdings which owns ADCO Constructions. RJH Holdings has owned the property for about 22 years, with the buildings used as a head office for ADCO’s Queensland branch and the sale included a four-year lease back.
Quanta’s founding director Stacey Jones said the purchase launches the Quanta Graham Street Office Trust and she is anticipating both strong rental growth and capital value uplift over the long term.
“We have every assurance in what this asset will deliver backed by a strong investment forecast – an anticipated five-year investment horizon with a net distribution of 8.25 per cent per annum in year one, rising to 9.25 per cent by year five, paid monthly,” she said.
“The property was also secured well above average CBD purchase yields at 8.59 per cent, with long-term upside further underpinned by strong tenant covenants and the location offering long-term redevelopment potential.”
The buildings have a total net lettable area of 3505 sqm with 73 car parks on a combined site area of 3743 sqm.
Mr Sandstrom said the expressions of interest campaign for the property attracted significant interest including from high-net-worth individuals, syndicators and partial owner-occupiers.
“This was a rare offering of dual buildings on one title, which provided buyers with flexibility and strategic benefits,” he said.
“With a leaseback in place the buyer will have secure income over the medium term, but 23 Graham St’s unique U-shaped configuration of the buildings offers a multitude of options, including the potential to divest one building in the future and keep the other.
“It also offers extensive usable land for future development, with the zoning allowing up to eight storeys.”
Mr Goddard said the location was a significant drawcard, being in the Brisbane fringe suburb of Milton.
Article by Chris Herde in The Courier Mail