600 Church St, Cremorne
Jan 2018 Purchase Price
Apr 2020 Valuation
600 Church Street, Cremorne occupies a high-profile location on the corner of Church Street and Balmain Street in Cremorne, one of Australia’s most desirable office precincts.
The newly constructed eight-level commercial office building comprises of ground floor retail space with double height ceilings and mezzanine, seven levels of office accommodation, and a large rooftop terrace for a total estimated NLA of 5,799m².
(On appraised valuation of $70m at settlement over 22-month project timeframe)
Transaction Analysis from Acquisition to Practical Completion
|Acquisition||Valuation (for Practical Completion)|
|Price||$50.0 million||$70.0 million|
|Sale/ Valuation Date||Jun-18||Apr-20|
|Net Income p.a.¹||$NIL||$3,673,969|
¹Net income based on fully leased property at market rates.
²NLA rate on acquisition based on forecast NLA of 5,799m², NLA of 5,788m² assumed in valuation.
Background and Opportunity
BSC acquired the yet to be constructed asset in June 2018 with no pre-commitment tenants and promptly began marketing it for lease.
- During construction secured six binding Agreement for Lease’s (AFL’s) to high-quality occupiers including the likes of Domain and The Hoyts Group.
- The asset was in excess of 75% leased prior to practical completion significantly exceeding model assumptions and all other speculatively developed offices in Melbourne’s fringe market during the same period.
- Rental terms achieved significantly outperformed model leasing assumptions and set new benchmarks for fringe leasing rates.
- Secured a premier retailer for the ground floor café, Axil Coffee Roasters to further enhance the amenity for office tenants.
- Settled the asset during the peak of the Covid-19 Pandemic in April of 2020.
This transaction demonstrated BSC’s ability to identify office assets that have the attributes required to attract quality tenants, and take on lease risk with a well-defined strategy, in doing so achieving outstanding results for investors.