Canberra's office sale record set to be smashed
Canberra’s booming office market, which last year reached a new annual high of $1.5 billion in sales, is off to a storming start in 2022 capped by the imminent listing of the Geoscience Australia building.
It’s tipped to fetch up to $380 million, easily surpassing the previous high of $335 million, set last October when Charter Hall and Singapore’s sovereign wealth fund GIC bought the office building at 50 Marcus Clarke Street in central Canberra.
Agent Paul Powderly from Colliers said more large Canberra listings are scheduled over the coming weeks, while a number of transactions on which negotiations started late in 2021 will close soon.
“Last year there were just under $1.5 billion in transactions, which was double Canberra’s record year,” Mr Powderly said.
“This year is no different, it’s started out strong, and this asset is going to form part of what’s going to be a large volume of sales in Canberra.”
Investors have been drawn to Canberra’s office market in unprecedented numbers, attracted by the security of long leases to federal government tenants.
“I’ll have $800 million in the slot by June, but the problem is you never know what happens over the next three months,” said Mr Powderly.
“If things escalate and interest rates rise, people could start being more conservative.
“But at the moment, right now, the first two months of the year have started like none other.”
The Geoscience Australia building has been put on the market by German investment manager Real I.S., which bought it for $234 million in late 2006.
It is being marketed by Mr Powderly, Matthew Winter, Adam Woodward and James Mitchell and JLL agents Tim Mutton, James Barber and Luke Billiau.
It has net income of $26 million and is 100 per cent leased to Geoscience Australia, which advises the federal government on the country’s geology and geography.
The asset is leased until 2032 and has a net lettable area 31,000 square metres.
In other Canberra market news, the sale of the Blackstone office asset at 14 Mort Street, which it inherited through the acquisition of the Soilbuild REIT, was supposed to settle last week but didn’t go through as planned.
Meanwhile, the building owned by Molonglo Group at 33 Allara Street has a potential buyer in due diligence with a sale expected soon.
