The famed Dymocks bookstore family is behind the latest acquisition within Brisbane’s in-demand CBD office market, having purchased a 14-level commercial tower for $42.1 million.
The real estate arm of the bookshop chain, Dymocks Properties, bought the recently refurbished 1970s property at 420 George Street in Brisbane’s legal precinct from Melbourne-based fund manager Forza Capital.
The deal was struck on a passing yield of 7.1 per cent and at a rate of just under $7000 per square metre.
The transaction was handled by Peter Court and Mike Walsh of Cushman & Wakefield.
The managing director of Dymocks Property, Cathy Tiberio, said the building’s proximity to the courts and transport links as well as its high occupancy were key factors in its most recent acquisition.
While less known for its real estate portfolio, Dymocks has been expanding its property holdings to help insulate the bookshop chain against the unpredictable nature of its core business. In 2014 the family announced it was on the hunt for property with $150 million to spend and an eye on Brisbane.
This is Dymocks’ second property acquisition in the Brisbane market.
Forza Capital, which looks for mispriced opportunities in the market, acquired the property for $20 million in 2015 as a distressed asset and went on to increase the building’s occupancy from 8 per cent to 96 per cent. The property has a WALE of 4.2 years.
“After a slow start, we have built some real momentum as a result of being very hands on and offering attractive leasing terms. Over 70 per cent of the building has been leased inside the last 2.5 years,” Ashley Wain, director of Forza Capital, said.
Forza Capital director Adam Murchie said their clients liked that they “got their hands dirty” to stabilise assets that might have had a few problems.
“We are pretty happy with the investment performance on this transaction, with investors achieving an 80 per cent total return over the life of the investment,” he said.
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