Alceon crunches the numbers to make $64m tax office play
The former Australian Taxation Office building at Mt Gravatt. Picture: Annette Dew
Investment manager Alceon Qld is doubling down on its purchases of Brisbane offices by picking up the Australian Taxation Office building in Mount Gravatt from Charter Hall’s specialist listed long-lease trust in a deal worth $64m.
The group is backing a leasing recovery, and the latest buy follows its purchase of an office and carpark building at 40 Tank Street in Brisbane City for $74m earlier this year.
The Charter Hall-run fund had bought the Mount Gravatt ATO building from US funds group LaSalle Investment Management in 2019 for $63.6m, before including it in its recently announced disposal portfolio.
Cushman and Wakefield and CBRE are understood to have advised on the sale of the fully leased, six-level, A-grade office building but they and the parties involved declined to comment. But it sold at a level in line with its December book value in keeping with the vendor’s belief that top quality assets will hold in value through the cycle.
The federal government building at 28 MacGregor Street in Brisbane’s southern suburbs was purpose-built for the ATO in 1992. The 14,286 sqm complex was refurbished in 2012, and again in 2017-2018, and has a five-star NABERS Energy Rating and a six-star NABERS Water Rating.
It is predominantly leased to the ATO, with 2.5 per cent annual rent reviews, and has 405 parking bays.
In June, the Charter Hall Long WALE REIT announced its progress on previously forecast divestments in line with its strategy to cut gearing. In February, it said it had completed or was unconditional on $145.8m of asset sales and had more than $500m of additional divestments in various stages of due diligence.
Last month it said a total of $684.5m worth of divestments had been settled or unconditionally exchanged. The recent sales consist of $225.3m of agri-logistics; $152.1m of social infrastructure; $96.8m of office; $96.3m of retail; and $114.1m of industrial property. Details have not been released, but the company said the passing yield on the disposals was 6.1 per cent. The sales cut the trust’s pro-forma balance sheet gearing to 29.3 per cent and look-through gearing to 36.4 per cent.
Alceon also bought the 40 Tank Street block from Charter Hall. It was sold by Charter Hall Long WALE REIT and the unlisted Charter Hall Direct PFA Fund.
The Mount Gravatt deal represented a rate of $4500 per square metre of improvements and was at less than half off its replacement cost. It also sits next to Queensland’s second-largest regional shopping centre.
The property also included 3200 sqm of surplus land, with a development approval for 179 residential units.
Alceon Qld also recently completed the refurbishment of the former TAB at Albion and secured a 10,000 sqm precommitment from the Queensland Fire Department.
