“We were very pleased to secure the property well below replacement cost”, Grant said.
“This is a fundamentally very sound building too. It has large floor plates, nice views, excellent natural lighting and a fantastic car parking ratio of 1:27. We plan to unlock the full income producing potential of the property with a comprehensive capital works program to deliver high quality, price pointed office accommodation in an increasingly cost sensitive occupier market. Once complete, we expect the asset will generate a fully leased yield of over 9%.”
The direct property team is already well underway with the underwritten capital works and leasing programs. Architects, project managers and service engineers have all been engaged to deliver the capital works in consultation with OPP and their appointed leasing agents.
Kalen Foster, Head of Investments, says speed of delivery is absolutely key. “We did not want to wait until settlement to get to work”, he said, “we want to deliver the main common area upgrades and first wave of fully fitted, speculative suites within four months of settlement so we can get this building leased as quickly as possible.”
“We’ve already struck two leases prior to settlement, so we are ahead of schedule with our leasing program. We’re also negotiating to reset a number of existing tenants who really like space and have issued proposals to several new tenants, so we’re already getting very good engagement from tenants, but our planned refurbishment will really accelerate our campaign”, he noted, “which is why we’re attacking this program with urgency”.
Executive Director, David Lewis, said the investment was well received by wholesale investors.
“Our clients are increasingly drawn to real estate given the volatility besetting other asset classes”, he said, “and they’re already beginning to appreciate our very conservative underwriting standards based on our investments to date”.
“We were pleased with the response and ongoing support from our investors and look forward to delivering a strong result.”