The Forza George Street Fund is an unlisted property fund which held a fully refurbished 6,285m2 commercial office building in Brisbane’s CBD. Purchased for $20,000,000, the Property is located within the “North Quarter” of the CBD and comprises 13 office levels together with ground floor retail tenancies and basement car parking.
The property was sold in July 2019 for $42,100,000 to a private Australian investor. At the time of sale, the property was 96% occupied, a far cry from the 88% vacancy Forza Capital took on when it acquired the asset. The high vacancy was the result of the Department of Transport vacating due to the former Newman Queensland Government’s public sector cutbacks and was in no way a reflection of the quality of the Property. In itself this is where the investment opportunity was.
The Fund acquired the asset to reposition the property and collect the cash flow arising from improving the tenancy profile. Since inception, the Fund has returned investors over 80% on their capital and given the need to start re-setting a number of leases and refinancing debt, the decision was made to divest the asset.
The property sits directly opposite the new Supreme and Magistrates Courts in George Street, and has been well supported by small to medium size legal practices, Barristers Chambers and associated businesses that need easy access to the Courts. The Property is also in close proximity to the new Queens Wharf $6 billion redevelopment precinct just announced by the Queensland Government.
The building features a side lift core, light to all four sides and efficient 466m2 floor plates make the building suitable for tenants seeking tenancies as small as about 65m2. The purchase price equates to $3,182m2 which is significantly below the replacement cost of the asset. To put this in perspective, since 2007 over $10,500,000 has been spent on upgrading and refurbishing all services, lift cars, lift motors and controls, new amenities to all levels, a refurbished ground floor foyer and entrance, a refurbished façade, new end of trip facilities (showers, toilets, bike racks and lockers) and tenant fit out works across all levels. Since purchase, the Fund has also spent substantial money on efficiency upgrades to improve the buildings NABERS rating but to also improve investment cash flow.
- Date July 27, 2015
- Tags Completed Investments