Blackstone office building at 38 Sydney Avenue Canberra sold to Irongate Group for $73.75 million. The deal was negotiated by CBRE Scott Gray-Spencer and Kenny Duncanson.

Irongate Funds Management Limited as responsible entity of the Irongate Group1 (IAP) is pleased to announce the following:

• The acquisition from Blackstone Group Inc.2 of a 100% interest in the property located at 38 Sydney Avenue, Canberra ACT (Property) for a total purchase price of A$73.75 million3 (Acquisition).
• A fully underwritten institutional placement to raise approximately A$50 million (Placement) at an issue price of A$1.47 per stapled security (Issue Price) to partly fund the Acquisition and the associated transaction costs.

The Property is an A-grade office building comprising 8,901m2of accommodation across four levels including a ground floor cafe in one of Canberra’s prime office precincts. The Property is being acquired on an initial yield of 5.13%4.

The Property is 55% leased to the Australian National Audit Office, a department of the Australian Federal Government functioning as the national auditor for the Parliament of Australia with 13.5 years remaining on the lease term and annual fixed rent reviews of 3.5%. The balance of the office space (3,920m2) is subject to a 24-month non-refundable gross rent guarantee provided by the vendor, resulting in a WALE for the Property at completion of 8.5 years5.

IAP CEO, Graeme Katz, said, “This transaction builds on IAP’s track record of acquiring strategically located, good quality income-producing properties. The Property has had approximately A$12.6 million spent on fit out and refurbishment works in the last two years including a full atrium lobby upgrade, the addition of end-of-trip facilities and refurbishment of on floor amenities.”

“The Canberra office market proved resilient through the COVID-19 pandemic, underpinned by the government sector. The Property is located 500m from Parliament House in a precinct with A-grade vacancy of less than 1%, and this, together with the Property’s NABERS energy rating of 4.5 stars and large floor plates that are easily subdividable, gives us confidence with respect to future leasing activities.”

To request a sales analysis please email either of the selling agents via the below contact forms.