A modern mixed-use building in the heart of Armadale has sold off-market for $10.6 million, delivering the owner with a handy gross profit of $2.6 million in just 12 months.
The three-level property, at 1155 High Street on the corner of Mercer Road, was sold prior to a planned official marketing campaign kicked into gear. The 1078sqm building comprises six shops at ground level, three upper-level office suites above and 19 basement car parks on a 653sqm site.
It was acquired for $7.9 million a year ago and since then has been subject to a major leasing campaign. “We saw the opportunity to add value to a quality asset via a significant repositioning and leasing program,” says Andrew MacGillivray, of Bayley Stuart.
“We successfully managed the process to deliver a return of close to 40 per cent for our club-based group of investors.
“Bayley Stuart has been repositioning assets for our clients for years and when this was put to us we thought it was a suitable, well located asset that offered a low risk profile and enhanced returns so we decided to put a club together.
“We are very confident in the experience and track record of our in-house leasing and management team and are drawn to assets like this which allow us to be hands-on and add value.
“We’re fortunate to have a very loyal investor base and are on the lookout for more opportunities as our business focus continues down the path of direct property investment.”
The property was sold by MacGillivray in conjunction with Colliers International’s Jeremy Gruzewski and Peter Bremner. With a weighted average lease expiry of almost five years and a prime strip retail location, 1155 High Street attracted strong attention.
“We had intended to take the asset to market later in the year however a short off-market sales strategy yielded significant interest and we were delighted to conclude a sale to a local private family,” says MacGillivray.
Gruzewski says the property was hotly contested by multiple parties, including both offshore and local buyers.
“The diversity of income over multiple tenants and rock solid location saw strong competition in an off-market sales strategy that led to a very strong result,” he says.
“The sale reflects a tight yield of circa 5 per cent and a high capital value on the building of just under $10,000/sqm.
“We are finding assets of this quality and prominence are in hot demand from a wide range of buyer groups in sought after locations such as Armadale. It is a sign of strength in the market.”