Korean investors snap up $225m Tuggeranong office in Christmas Eve sale

The $225 million sale of a Tuggeranong office block to Korean investors has brokers predicting even greater interest from foreign investors in the region in 2016.

Final negotiations on Christmas Eve secured the Louisa Lawson Building for South Korean property investors FG Asset Management, whose purchase of the two-year-old development proved to be the most valuable sale of the year.

The sale of the Louisa Lawson Building for $225 million was the biggest commerial property deal in the ACT for 2015.
The sale of the Louisa Lawson Building for $225 million was the biggest commerial property deal in the ACT for 2015. Photo: Jamila Toderas

Bought with the help of financial services group Challenger, the value of the purchase was three times higher than the next most significant commercial property deal of the year; the $75 million sale of three government buildings less than 750 metres away.

The purchase is also the single largest in Australia for FG Asset, which recently made deals for Australian Taxation Office buildings in Melbourne and Albury worth $165 million and $64.8 million respectively.

The 26,000 square metre Louisa Lawson building was custom-built in 2013 for the Department of Human Services, which is on a 15-year lease.

Built over two years at a cost of $100 million, it includes parking space for more than 500 vehicles, meeting and broadcast facilities, as well as cafe spaces.

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Colliers International ACT state chief executive Paul Powderly brokered the deal with the Koreans, which he said showed foreign investors' continued interest in Australia for long-term lease properties.

"It's an important sale for the marketplace because it showed there's confidence in good properties with long-term leases," he said.

"A couple of parties were interested but these guys paid a little bit more."

Mr Powderly said most interest was in Tuggeranong because it was one of the few areas to offer consistent long-term lease options to the market, but expected that trend to increase in 2016 due to large prices fetched over the last 12 months.

"Vendors haven't been keen to sell because the prices haven't been good enough," he said.

"Now this shows you can get a 6 per cent or lower cap rate if you've got the right asset."

The $75 million sale of the three Greenway buildings, earlier in December, which are also leased to the Department of Human Services long-term, is believed to have gone to the Melbourne-based Julliard Group, one of that city's largest investors.

The next highest-sale for the year was for 255 London Circuit in November, which went for $70 million to Growthpoint Properties Australia

The Civic building is leased to the Department of Foreign Affairs and Trade until 2026.

Mr Powderly said Australia was often seen a lucrative market for the purchase of buildings with long-term leases.

"At the moment the stars are lined up: interest rates are lined up, foreign investors are looking for homes and Australia has stable government."