Investors look to lock down a piece of the Milton market on the way up
28 February 2019
A significantly undervalued Milton commercial property market may shortly have its first major asset sale of the year, with Quintessential Equity expecting strong interest in 8 Gardner Close after today announcing the building was up for sale.
Russell Bullen, Quintessential Equity Chief Executive Officer, said extensive refurbishment over the past eighteen months had transformed the building’s aesthetic and functional appeal and led to a successful leasing campaign that took it from 80% vacancy to full occupancy in just over a year.
“The building leased very well, consistently attracting tenants – the building’s strong, underlying attributes such as amenity, carparks and accessible location, coupled with a rebounding Milton office leasing market have earmarked 8 Gardner Close as a rare investment opportunity,” said Mr. Bullen.
“The asset underwent a multi-million dollar refurbishment that included mechanical upgrades, sustainability measures and cosmetic works on the façade and interior, with upgrades to the lobby and bathrooms, as well as the installation of end of trip facilities, to future-proof the building.
“Importantly, 8 Gardner Close offers investors a fully leased asset with a Weighted Average Lease Expiry of 5.3 years by income across 10 current occupants, including Kramer Ausenco, OpenGear and Henry Schein Halas,” he said.
In order to attract small to medium enterprise, Quintessential Equity took the strategic approach of splitting the office space and providing seamless, turnkey solutions including custom, all-inclusive fit-out packages for the tenants.
“A greater number of smaller offices also enabled us to achieve a diverse tenant mix and secure cash flow that will underpin expected capital growth into the future,” said Mr. Bullen.
Nick Spiro and Glenn Wright from Cushman Wakefield and Knight Frank’s Matt Barker, Justin Bond and Christian Sandstrom have been enlisted to sell the property.
Nick Spiro, Director at Cushman & Wakefield Brisbane, said he expected strong interest in 8 Gardner Close due to the quality of the asset and the potential for growth as a function of the ascendant local market.
“Our research indicates that Milton will outperform the Brisbane CBD and other secondary leasing markets over the next five years as it rebounds from what is an exceptionally low base,” said Mr. Spiro.
“In fact, from a national perspective we believe Milton is the nation’s most underpriced office leasing market, with its vibrant location and proximity to transport infrastructure driving future growth and underpinned by South East Queensland’s strong economic outlook,” said Mr. Spiro.
Justin Bond, Partner at Knight Frank, described 8 Gardner Close as a unique investment opportunity within a local market that had grown more resilient over the past decade.
“The refurbished 8 Gardner Close offers a fresh take on Milton’s thriving commercial precinct with works transforming the asset into a distinguished long-term commercial investment opportunity that is set to outperform the competition in Brisbane’s CBD fringe market,” said Mr. Bond.
“At the same time, South East Queensland’s strong economic outlook, pipeline of major infrastructure projects and forecast population growth, means the Milton market is more resilient and robust than ever before,” he said.
Mr. Bullen said Quintessential Equity would seek more acquisitions in Brisbane and the broader Australian market following the sale.