$93m Townsville sale breaks city’s office record

The sale of a Townsville office block has broken the regional city’s price record for a commercial office building.

A fund managed by Castlerock snapped up the ‘Verde Tower’ at 445 Flinders St for $92.855 million, which selling agents Colliers say is a record for the region.

The landmark transaction comes after 18 months of negotiations that ensued after Castlerock purchased the Verde Central tower in Mackay for more than  $52 million in December, 2018.

The 12-storey ‘Verde Tower’ features 11,615sqm of net lettable area over the top eight levels, with 195 parking bays on the ground and three podium levels, and is almost 90% tenanted by the State of Queensland.

Also included in the sale is a 1523sqm parcel of land at the rear of the property, which has been utilised for at-grade parking operations.

The Verde Tower in Townsville.

The transaction for the office building component came at an initial yield of 7.75%.

Colliers Townsville associate director Neville Smith, who negotiated both the Townsville and Mackay sales, says major investors are increasingly transacting in key regional hubs.

“It is a huge vote of confidence for the region and in particularly Townsville for a major fund management company such as Castlerock to invest in such significant assets,” Smith says.

“It is not often you see assets of this magnitude transact in regional areas as they are of a size that would typically relate to the capital cities.”

Colliers Townsville managing director says that prior to the onset of the coronavirus, Townsville was “on the way up”.

“We were experiencing the highest level of commercial property interest we had seen in years and boasting an impressive pipeline of major projects that was fuelling this interest.”