The off-market sale of a strata-titled VicRoads customer service centre in Melbourne suburb of Ringwood to a Chinese-based investor shows investors are turning to defensive, safe-haven assets in order to insulate them from the ongoing impacts of the COVID-19 pandemic, Savills says.

The asset at 93A Heatherdale Road, which is under constructions, forms part of the ‘Base Ringwood’ development and will provide an initial lease term of 12 years with commencing net rental of $469,580 per annum.

The sale price of $9.3 million represents a yield of 5 per cent.

At a glance:

• An off-the-plan VicRoads customer service centre has been sold off-market to a Chinese-based investor for $9.3 million at a yield of 5 per cent. 
• The property forms part of the ‘Base Ringwood’ development, which also comprises offices and store warehouses.
• The deal was negotiated by Savills agents Jesse Radisich and Benson Zhou on behalf of developer Sector Property Group.

Savills agent Jesse Radisich, who negotiated the off-market sale with Benson Zhou on behalf of developer Sector Property Group, said the immediate, strong buyer interest in the opportunity showed investors were seeking opportunities where they will have certainty of income both now, and beyond the impacts of the pandemic.

"Buyers were immediately drawn to the security and certainty that the Government lease covenant offered, and they were willing to act extremely quickly and accept a very tight yield in order to secure the property," he said.

“The demand demonstrated for this opportunity is a reflection of the rarity of investment opportunities offered to the market with Government lease covenants and the fact that yield essentially becomes secondary to security of tenure and income in the current market."

Mr Zhou said buyer demand from off-shore investors remained strong, with Australia seen as a safe-haven investment location with strong fundamentals and growth prospects into the future.   

“We were able to quickly tap into our global network as well as deep ties with the local intermediaries and secured a number of offers within a matter of days," he said.  

"Our many years of activity within the Asian communities has provided a strong reputation and level of trust within our network and with buyers."

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