Centuria Offloads Brisbane Offices for Below Book Value

In what could be a sign of ominous times ahead, Centuria has offloaded a Brisbane A-grade office for less than it acquired it for four years ago.

The market has been anxiously waiting for price discovery to wash through the office sector and valuations are in line for a correction. 

Centuria’s Diversified Property Fund acquired the 2847sq m net leasable commercial building at Hamilton Northshore in 2019 for $18.85 million (excluding outstanding incentives). 

The building has now transacted for $18.3 million and was sold to a private investor, according to Cushman and agents Mike Walsh and Peter Court. 

A Centuria Group spokeswoman confirmed that “the unlisted, open-ended Centuria Diversified Property Fund (CDPF) has divested a non-core office building at 381 MacArthur Avenue, Brisbane”. 

“The transaction represents less than 4 per cent discount to the asset’s prior book value. Proceeds from the sale will be used to reduce debt,” she said.

The commercial office building within Brisbane’s Northshore office precinct is a three-level, A-grade building developed by Alceon Graystone in April 2018.

Cushman & Wakefield joint head of middle markets Mike Walsh said the office building was acquired fully leased with weighted average lease expiry of 2.3 years. 
 
“The area has been designated as the future home of the 2032 Olympic Village and is expected to house more than 15,000 people,” Walsh said. 

“From a broader market perspective, we have had a positive start to the year from an activity standpoint. Clearly the market is highly price sensitive at present and after reaching a nadir at the back end of 2022, there is a renewed appetite and desire to transact from a mix of purchaser groups on the proviso pricing guidance is realistic.”
 
“Our team currently has over $180m of mid-markets assets in due diligence across the eastern seaboard, with another $250 million worth of stock currently in the market or forthcoming shortly giving us a very accurate lens as to current market dynamics.”