NRMA House is unlikely to be given the Cinderella treatment by its new owner, with the Plain Jane of Braddon set for a date with the wrecking ball.
Insurance group IAG listed the office tower at 92 Northbourne Avenue this month via expressions of interest through CBRE agents Andrew Stewart and Mark Nicholls. Price expectations are for $20 million-plus.
Andrew Stewart says the super site encompasses a huge swathe of prime real estate in one of Canberra’s most sought after inner-city precincts.
“The majority of inquiries are coming from local and interstate residential developers but there have been a few commercial developers who have inspected it as well with most interested parties looking to demolish the building,” Stewart says.
NRMA’s fate as a multimillion-dollar knockdown reflects the 6270 square-metre site’s redevelopment potential with CZ2 zoning permitting a broad range of uses including offices, hotel accommodation, residential, student accommodation and health care.
“As high-density residential, a developer could fit 200 or 250 apartments on that site subject to planning so at the price point and the cost of demolition it will yield well,” Stewart says.
Despite the site’s prime gateway location, it has not attracted foreign interest.
“The end product could possibly attract overseas investment but as a development site, we haven’t seen foreign money come in for assets like this one. Most foreign investment in Canberra is for long-term leased investments,” Stewart says.
CBRE agent Mark Nicholls says repurposing the existing six-level 1970s structure could limit its return on investment.
“The floor-to-ceiling height is quite large in that building so if it was demolished a new building of the same height would accommodate more levels, thus potentially offering a greater yield as a knockdown,” Nicholls says.
NRMA House has three street frontages with sweeping views of surrounding mountain ranges and is a short walk to the CBD and ANU.
The IAG sale comes at a time of major redevelopment along Northbourne Avenue and follows a record year for commercial sales in Canberra.
Expressions of interest close on Thursday, May 5.