Non-bank lender Wingate is ramping up its direct investments in commercial property after buying a 20-level office tower in Brisbane’s CBD for $108 million.
The B-grade office block at 200 Mary Street was sold by fund manager Cromwell Property Group, who had held the asset and used it as its headquarters since purchasing it from AMP in 2001.
It is strategically located in Brisbane’s financial district known as "the Golden Triangle", within the Eagle Street Pier precinct.
The transaction was brokered by CBRE’s Peter Chapple, Bruce Baker and Tom Phipps and represented a premium to book value of 8.1 per cent after settlement adjustments.
The 13,900sq m building has been progressively refurbished and modernised over the last two decades in order to attract higher quality tenants and ultimately deliver optimal returns for Cromwell’s securityholders.
It now offers an average floor plate of 710sq m along with one retail tenant on the ground floor and sits above a three level basement carpark accommodating up to 194 vehicles.
Late last year, LogiCamms Australia became the largest occupant within the building signing a five-year renewal including 520sq m of additional space, in addition to their existing occupancy on levels 15 and 16.
Cromwell also tied down Boyd Legal, ERA, SRK Consulting, AGL, Veitch Lister Consulting, Vena Energy, Northrop and The Property Communications Group to new leases in the building prior to the sale.
For Cromwell the sale follows recent progress on the sale of other non-core assets including Village Cinema Centre in Geelong for $19.8 million and the exchange of contracts on the TGA Complex in Symonston, expected to settle at the end of June.
Cromwell chief investment officer Rob Percy said the sale down of a number of its non-core asset sales had banked the fund manager $140 million of capital which it plans to use to reduce gearing prior to reinvestment in more strategically aligned initiatives.
“We have created significant value through repositioning [200 Mary Street] and, with high quality tenants and long-term leases in place, now is the right time to capture significant upside and unlock the value Cromwell has achieved,” Percy said.
Cromwell plans to remain headquartered at 200 Mary Street with its current lease in place until early 2024.
Melbourne-based Wingate Group, one of the oldest non-bank lenders in the country, will take ownership of the building in early July.
Backed by its ultra-high-net worth investor base, Wingate grew its debt book 25 per cent to more than $2 billion over the last financial year and boosted its operating profits 11 per cent to $23.8 million.
While the non-bank lender is still focused on residential land and apartments across the major markets, it has been actively reviewing opportunities across a number of property sub-sectors including office and hotels in recent years.
Wingate has been increasing its exposure to commercial assets following the $500 million collapse of Sydney developer Ralan. Wingate was Ralan's primary lender.
Earlier this year, Wingate outlaid $52 million for an eight-level car park at The Rocks in central Sydney, acquiring the 589-bay Quay West Car Park leasehold from ASX-listed Mirvac, which had put it up for sale in October.
Wingate has also tapped into rising demand for last-mile logistics space, partnering with Perri Projects to build a 14,000sq m industrial hub in West Melbourne.
