Skip Ribbon Commands
Skip to main content

News release


CBD office landmark listed for sale as investors target Canberra

​​One of Canberra’s most recognisable office buildings, 73 Northbourne Avenue, has been listed for sale on behalf of Hume Partners Property.

CBRE’s Andrew Stewart and Scott Gray-Spencer, and JLL’s Michael Heather and Rob Anderson, have been appointed to market the 100% leasehold interest in the prominent CBD asset.

This follows significant transactions in Canberra in 2015 including the $225 million sale of the Louisa Lawson building, 134 Reed Street for $75 million by CBRE as well as the sale of 255 London Circuit by JLL on an initial yield of 6.46% .

Hume Partners Property Managing Director Scott Davies said the sale plans had been activated after a year of significant investment activity in Canberra, with circa $435m in office assets traded – the highest volume of sales since 2009.

“We identified that 73 Northbourne Avenue would be an attractive proposition for purchasers in light of the current market conditions, whereby it’s becoming increasingly difficult to secure investment grade assets in Sydney, Melbourne and Brisbane,” Mr Davies said.

“Sustained appetite and competition is expected for assets in Canberra over 2016 due to the shortage of investment grade assets on the eastern seaboard “

Situated at the gateway entrance to the Canberra CBD, 73 Northbourne Avenue provides A-grade office accommodation standards with strong environmental credentials.

Renowned for its striking, glazed façade, the modern, seven-level office building was constructed in 1987 and significantly refurbished in 2007 and 2015. It has benefited from a comprehensive capital expenditure program and is currently performing to a 4.5-Star NABERS Energy rating, whilst targeting 5-Stars upon the next review in December 2016.

The building has a net lettable area of approximately 6,112sqm and two levels of basement space used for car parking and storage. The leasehold has 69 years remaining with a statutory right to take up successive terms – providing, in effect, a lease in perpetuity

CBRE’s Canberra Managing Director Andrew Stewart said a key draw card for purchasers would be the building’s diversified cash flow and quality tenancy covenants with the asset primarily leased to Australian Fisheries Management Authority and Dixon Advisory alongside Bankwest, Technology One and FEI Australia.

The yield differential between Canberra and other core CBD office markets would be another attraction, with Mr Stewart noting that this yield spread had widened over the past 24 months.

“Astute investors are viewing Canberra as a classic ‘counter cyclical play’ at a time when commercial leasing conditions are strengthening, particularly in the A-grade sector,” Mr Stewart said, adding that the sale of the Louisa Lawson building, 134 Reed Street and 255 London Circuit highlighted the investor interest in well located assets with quality lease covenants.

The rebound in the Canberra leasing market has been one of the clear drivers of investment demand, with JLL research recording three positive net absorption quarters over 2015 resulting in a net absorption rate of 18,000sqm.

“In the past 12 months there has been a sustained recovery in leasing conditions in the Canberra office market which has instilled investor confidence in Canberra,” JLL’s Head of Sales and Investments – ACT, Michael Heather, said.

“The Civic precinct, in which 73 Northbourne is situated, was one of the more consistent and solid performing office markets in Australia in 2015. Key indicators such as a solid full year net absorption rate and a reduction of sublease space, suggests that the market has passed its cyclical trough period, and positive total return expectations over the medium term can be expected.”

Mr Heather noted that 73 Northbourne Avenue benefitted from efficient and flexible floor plates, generous natural light, an above market car parking ratio and ground floor tenancies with high exposure to major arterial roads.

This building also has the plant specification and floor plate characteristics to meet the new Commonwealth Government work place ratio standards.

Expressions of Interest close Friday 11 March, 2016.​