Business

DFAT $70m building sale settles after security all-clear

Settlement on the largest office building to sell in the Canberra CBD for more than two years went ahead on Friday after confirmation the sale posed no national security risk.

The Department of Foreign Affairs and Trade provided the confirmation for the building at 255 London Circuit, which sold for $70,025,000 to Growthpoint Properties Australia in November.

The department holds a lease for the building until 2026.

The property was sold by JLL ACT's sales and investment head Michael Heather and his colleague, international investments head Simon Storry, as part of an international expressions of interest campaign on behalf of London-based vendor Brompton Asset Management.

Growthpoint is an ASX-listed real estate investment trust headquartered in Melbourne. It owned 55 properties across the industrial, office and retail sectors as of September, and in a statement to the ASX on Friday said the Civic property was its 19th office investment.

The sale was the third largest commercial property deal contracted in the ACT last year, behind the $225 million to be paid by a South Korean company for the Louisa Lawson Building in Tuggeranong, specially designed for the DHS in 2013, and the $75 million paid by a vendor believed to be the Melbourne-based Juilliard Group for the nearby 134 Reed Street, Greenway trio of DHS-leased buildings.

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Mr Heather said the 255 London Circuit deal was the largest office sale in the Canberra CBD since the vendor, Brompton, bought Industry House in 2013, and boded well for 2016 office investment.

"Canberra offers investment diversification, attractive yield, low 'new supply' risk and a low cost base per building area relative to Sydney and Melbourne," he said.

"The pick up in leasing conditions in the Canberra office market over 2015 has also instilled investor confidence in Canberra.

"A solid full year net absorption rate and a reduction of sublease space suggests that the Canberra office market has passed its cyclical trough period and sustained investment appetite and competition for quality assets in Canberra is expected over 2016."

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