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News release

CANBERRA

Investment in ACT’s office market strong for first six months of 2015

Recent $16.8 million sale of modern Canberra CBD asset reflects continuing demand in second half of year


Investment in the ACT's office market for the first half of 2015 is tracking in line with last year's sales volumes, according to JLL's preliminary figures. A recent $16.8 million sale has also seen a positive start to the second half of the year for the territory.

As at 30 June 2015, $122,080,000 worth of office sales were recorded in the ACT. This compares to the $233,115,000 recorded for full year 2014. The activity in the ACT has remained strong despite lower volumes for the office sector nationally for the first half of 2015, which saw $9.9 billion of sales (above $5m) across the office, retail and industrial sectors recorded. The national half year results tracked below the 2014 figures, which saw a record $30 billion of office, retail and industrial transactions recorded for the full year.

Demand in the ACT's office market is continuing to be felt in the early stages of the second half of the year, with JLL's Michael Heather and Greg Lyons managing the sale of a modern Canberra office asset for $16.8 million. Located at 64 Allara Street in the CBD, the A-Grade boutique office building was purchased by Cromwell Allara Street Trust from Australian Ethical Property Trust. It features a 100% occupancy rate for the office accommodation and is leased to Jacobs Australia, CIC Australia, Airservices Australia and AG Coombs Group. The property has a Net Lettable Area (NLA) of 3,155sqm and the sale price reflects an initial passing yield of 8.03%.

JLL's Head of Sales and Investments - ACT, Michael Heather, said the first half year results were strong considering national volumes for the office market were down. "The sales volumes in the ACT's office sector for the first half of the year demonstrate that buyers are continuing to recognise office assets as attractive and stable investment prospects, particularly in Canberra," he said.

"The demand in the ACT for both multi-tenanted and government leased assets is outweighing the available stock and driving competitive offers from buyers. This is heightened by the scarcity of assets around the country which is also bolstering demand.

"The strong interest we saw in 64 Allara Street is reflective of this, demonstrating that securely leased assets to either private or government tenants, with a minimum WALE of 4 years or greater, remain very coveted in the market. Not only is the property leased to an excellent tenant profile, but offers an attractive initial yield for an A-grade asset in a CBD location," Mr Heather said.

The first half of 2015 saw a number of significant office transactions in the ACT, including the sale of 54 and 60 Marcus Clark Street and 20 Allara Street in Canberra.