Fully leased office building owned by Terraplex is sold following significant interest
A fully leased office building at 187 Todd Road in Port Melbourne has been acquired by Abacus on behalf of Abacus Todd Road Trust for $43.5 million.
Colliers International’s Peter Bremner, Rob Joyes and Leigh Melbourne, in conjunction with Dawkins Occhiuto’s Andrew Dawkins, Walter Occhiuto and Chris Jones, sold the property on behalf of local syndicate Terraplex via an Expressions of Interest campaign that generated significant buyer interest.
The sale price reflects a passing yield of 6.17% and capital value rate of $4,721 per sqm. Mr Bremner said the building’s strong and diverse tenant profile, as well as its prime location within the Fishermans Bend Employment Precinct, were key factors in generating strong competition among a range of buyer groups.
“After 14 offers were received in the first round, a second round resulted in an unconditional offer from Abacus with a 30-day settlement,” Mr Bremner said.
“The buyer will look to tap into the rent reversion from the exciting Port Melbourne office market. In the years ahead this will prove to be a very strategic site, due to the State Government infrastructure and spending which will happen on the 40ha former General Motors Holden site directly opposite."
The four-level building is home to five high-calibre tenants, including Wesfarmers’ Workwear Group, Emirates Retail Leisure and George Weston Foods, returning about $2,687,020 per annum in net passing income.
Terraplex Director Anthony Wilson said the property was fully leased to high calibre blue chip tenants with a diversified income stream and a varied expiry profile with no imminent expiries.
“This building has attracted companies that produce world-leading research, engineering, technology and products, and support Melbourne’s global competitiveness in high-tech advanced manufacturing; provide an array of transport options; and offer ample green spaces,” he said.
187 Todd Road is located within the Fishermens Bend Employment Precinct, which has been designed to be Australia’s new headquarters for design, engineering and technology, driving private sector investment and attracting industry leaders in defence, education, aerospace, automotive design and marine design.
“With the Port Melbourne Commercial precinct having reduced from 485ha to approximately 200ha there will be a significant increase in demand from occupiers being ‘displaced’ from the Capital City/Residential precinct of Fishermans Bend,” Mr Dawkins said. “This ‘decanting’ effect coupled with a reduction in office supply from neighbouring precincts such as St Kilda Road will be the primary driver in growth for the area in forthcoming years.”