Growthpoint sells office to Centuria for $106m

6 April 2017

Publication: The Australian Financial Review
Author: Su-Lin Tan
Date: 6 April 2017

Growthpoint sells office to Centuria for $106m

ASX-listed Growthpoint Properties Australia has sold an A-grade office building at in Nundah, Queensland to Centuria Property Funds for $106.25 million and a industrial facility at 29 Business Street, Yatala, also in Queensland, to a private investor for $10.65 million to pay down existing debt.

The 12,980sqm Nundah property at 1231-1241 Sandgate Road, which is fully leased to tenants such as Energex and Powerlink with a weighted average lease expire of 9.3 years, was sold at a 6.9 per cent initial yield.

Growthpoint purchased the property in 2011 for $77.9 million and will settle its sale to Centuria in early July.

The 8680sq m Yatala property at 29 Busi­ness Street is leased to CMC Steel Distribu­tion and its sale will settle in March.

Both sales have exceeded their respect­ive book values at December 31 by about 3 percent.

The sales will reduce Growthpoint’s gearing ratio to 39.4 per cent and com­pletes the company’s capital management initiatives for 2017.

This forms part of Growthpoint’s plans to reduce debt and rebalance its portfolio towards offices, following its GPT Metro Fund takeover in November 2016.

Since then Growthpoint has sold $322.8 million in property including an industrial portfolio in Victoria to Singapore’s Maple­tree Logistics Trust for $142.2 million.

Centuria in tum will place the Nundah property in a new unlisted fund, the Centuria Sandgate Road Fund.

The initial term of the trust is six years; with a forecast distribution of 6.5 per cent in the first year and 7 per cent in the second.

“Sandgate Road is located in a high­growth area of Brisbane where over 1000 new dwellings have been built over the past four years,” Centuria unlisted property funds chief executive Jason Huljich said.

‘There is also the added benefit of expec­ted capital growth, as Nundah continues to expand and the Brisbane office market improves.”

CBRE’s Flint Davidson, Bruce Baker and Tom Phipps handled the sale of the Nundah property.

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