Property fund manager Centuria Capital has dipped into Melbourne's booming office market with the purchase of a commercial building on the city's outer suburbs, for $27.8 million.
The A-grade property at 13-15 Compark Circuit in Mulgrave, which was bought through Centura's unlisted Diversified Property Fund, is the latest addition to the fund manager's holdings, which has strong expectations for growth to “ramp up in the next six to 12 months”.
The property, which was sold through Knight Frank’s Tom Ryan and Tim Grant and Dawkins Occhiuto’s Andrew Dawkins and Chris Jones, has a net lettable area of 8,334sq m and is fully leased with a 3.3-year weighted average lease expiry.
The asset was sold by Brisbane-based vendor Stronghold Investment Services after purchasing the property in June 2017 for $21.5 million.
The property is located in the heart of the Monash Office and Technology Precinct, one of the largest office precincts outside the Melbourne CBD.
Centuria fund manager Doug Hoskins said Melbourne's markets remained an attractive opportunity with yields set to continue to compress.
“We believe this acquisition is well positioned to retain and attract the long-term quality tenants that contribute to sustainable income streams.”
Centuria’s joint CEO Jason Huljich added that its fourth acquisition for the newly-created Centuria fund closely aligned with the its strategy—“to increase its balance of direct property exposure.”
The group’s strategy to accelerate growth of its assets under management, aligns with two other acquisitions this year—a six-level office building at 10 Moore Street in Canberra for $35 million and a new-build office property in Brisbane's Northshore Hamilton for $19.7 million.
Centuria also parted with $89 million for the 11,484sq m IBM Tower in Brisbane's CBD, which it bought from US-based property group Hines through a new unlisted single-asset fund.
The property fund manager has been on a capital raising spree of late, flagging plans to diversify into the healthcare sector with a $500 million mandate from European giants AXA Investment Managers and Grosvenor Group.