Fundie sells Victoria Surf Coast office development for $40m
Fund manager IP Generation’s punt on Victoria’s Surf Coast office and hospitality market becoming a booming destination for tenants and investors has paid off handsomely after it sold the redeveloped headquarters of iconic surfing brands Quicksilver, Roxy and DC to a Melbourne-based family for just over $40 million.
Headed by Chris Lock, IP Generation paid around $15 million for the Baines Crescent building in Torquay – near the world-famous Bells Beach – and then spent another $13 million turning it into a 6096 sq m mixed-use facility that includes flexible working space, a microbrewery and a wellness centre.
About 25 per cent of the building is still leased to Boardriders – the Oaktree Capital-backed firm that owns Quicksilver, Billabong and other Aussie surf brands – under a new long-term lease.
The new owners – Sevens Investments Group directed by Melbourne-based Ledong Zhang – acquired the fully leased property for $40.06 million on a yield of 5.59 per cent in a deal negotiated by Paul Burns of Fitzroys. It was offered with a 12-year weighted-average lease expiry,
New tenants introduced following the refurbishment by IP Generation include Sou’west Brewery, flexible workspace provider Surf Coast Social, the Great Ocean Road Coast & Parks Authority and The Bathhouse, a collaboration between beauty operator Little Company, and Pilates and yoga fitness studio Core Plus.
Mr Lock said the sale reflected the quality of the building, resulting from considerable capital investment, as well as growth in demand for high-grade commercial property in the Surf Coast region.
“We identified value-add opportunities at 27 Baines Crescent, consistent with our investment strategy, and are very pleased with the outcome of the sale,” Mr Lock said.
Mr Burns said IP Generation had “taken a punt” when they bought the property but had “read the tea leaves pretty well”.
“Torquay has a tightly confined commercial precinct which is experiencing unprecedented demand from the influx of ‘sea changers’ in response to COVID and flexible working arrangements,” Mr Burns said.
“The purchaser recognised the excellent long-term rental prospects and potential of the site, and the ultra-rare opportunity to gain a foothold in one of Australia’s fastest-growing regions.”
The near 2ha site, which includes parking for 202 cars, has the potential to host a second building, Mr Burns said.
Torquay – the largest town on the Surf Coast and the gateway to the Great Ocean Road – has been pinging on the radars of city-based investors since the pandemic drove more people to relocate to coastal hubs.
Last year, the Coles-anchored Torquay Village changed hands for $40 million on a yield of about 5 per cent while former Morgan Stanley executive Jack Dahan paid $12.8 million for the Sands golf resort.
