The sale of 18 Honeysuckle Drive for $52.2 million shows the revitalisation of Newcastle’s CBD waterfront precinct is attracting investment to the city and stimulating commercial property values, Colliers International says.

Developed by Doma, the A Grade 18 Honeysuckle Drive has achieved one of Newcastle’s highest-ever office sale prices, representing a yield of approximately 6.2 per cent.

 The seven-level, 6,524sqm Net Lettable Area, 5-star Green Star rated building was purchased by IOOF Investment Management Ltd and is to be included in its Property Plus Australian direct property portfolio. 

At a glance:

• The fully tenanted office building at 18 Honeysuckle Drive, Newcastle has been sold for $52.2 million at a yield of about 6.2 per cent.
• The seven-level, 6,524sqm Net Lettable Area, 5-star Green Star rated building was purchased by IOOF Investment Management Ltd.
• The deal was brokered through Colliers International.

According to Colliers International data, A Grade vacancy rates in Newcastle are currently 2.8 per cent and forecast to fall further. 

Last month, Doma commenced construction of Newcastle’s latest 15,000sqm NLA A Grade building, designed by Bates Smart and anchored by Property NSW at the Newcastle Interchange, furthering their investment in the city and due for completion late 2020. 

Related Reading: Opportunity blooms at 18 Honeysuckle

Colliers International National Director Commercial Sales and Leasing, Peter Macadam said the on-market EOI campaign drew significant interest from institutional and private investors looking for an asset with a well-considered tenant profile and WALE of approximately 6.8 years.

IOOF Investment Management Senior Portfolio Manager, Simon Gross said a mix of the location, modern construction, high specification, a mix of quality government and private tenants, and the strength of the local economy was behind the decision to buy.

“We are very pleased to add 18 Honeysuckle Drive to our portfolio given the strong fundamentals of the Newcastle market," he said.

"On average, tenants have nearly seven-years left on their leases and we look forward to building strong partnerships with each of them.” 

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