Colliers International sells CFA headquarters in Burwood East via expressions of interest
The long-term headquarters of the Country Fire Authority (CFA) at Burwood East has sold for $18.08million following a competitive expressions-of-interest campaign, demonstrating the ongoing demand for high-yielding commercial investments in Melbourne’s east.
The private arm of Teo Tong Lim, group managing director of Singapore-based Tong Eng Group, purchased the modern three-level office building at 8 Lakeside Drive, one of the most high-profile properties within Tally Ho Business Park, earlier this month.
This transaction follows the group's recent acquisitions of 5 Queens Road, Melbourne, and 117 Clarence Street, Sydney.
Colliers International’s Peter Bremner, Rob Joyes and Rachael Clohesy, in conjunction with Dawkins Occhiuto’s Andrew Dawkins, Walter Occhiuto and Chris Jones, brokered the deal on behalf of Melbourne-based investor, Kador Group.
“The campaign was hotly contested by a range of buyers, including local private investors, Sydney-based institutions and offshore buyers,” Mr Bremner said.
“We received 10 expressions of interest and pleasingly, the sale was concluded with Tong Eng Group after a relatively quick two-week due diligence period.”
Tong Eng Group’s investment director, Terence Teo, said the group was “pleased to acquire such a prominent building in the blue-ribbon eastern suburbs”.
“Set within pristine landscaped surroundings, the location is top notch, with beautiful homes amidst a hive of retail activity,” he said.
Fully leased to the CFA (99 per cent) and Telstra and generating $1,697,176 net per annum, the 4,552.5sqm (NLA) office building has a short-term WALE of just less than 2.5 years, with the sale price reflecting a passing yield of 9.38 per cent.
“While the passing yield was unusually high, it reflected the over-let nature of the passing rent, plus the short WALE remaining to essentially a single tenant,” Mr Dawkins said.
“Tally Ho Business Park is considered one of Melbourne’s best known hi-tech office parks and has always attracted long-standing quality tenants, such as VicRoads, Hewlett Packard, Motorola, ESTA and Ambulance Victoria, to name a few.
“The building is still in very good condition and buyers realised that while the CFA are likely to stay and renew a new lease, the building would still be relatively easy to lease to single or multiple tenants even if they left.”
The sale marks the second significant office building that Colliers International has transacted at the Tally Ho Business Park in the past nine months, following the sale of the Motorola office headquarters for $19.55million in December last year.