The Forza Russell Street Fund is an unlisted property fund which holds a quality 4,081m2 commercial office building with 50 basement car parks located in the vibrant South Brisbane market. Purchased for $23,650,000 in March 2019, the Property is an existing 3 level office asset in a dynamic location which has a 12 level height control and flexible zoning. Acquired on a 6.8% yield, the purchase price equated to $5,795m2 based on NLA which compared very favourably given recent sales of similar assets.
The Property was acquired approximately 66% occupied and within the first six months a whole floor Government tenant was secured on a long term lease for the vacant space. The Fund now has a WALE of over 6 years and is 100% leased to Government tenants. Subsequent to this, the property was revalued to $27,000,000 (net of incentives) which allowed for a refinance to occur and 21% of capital to be returned to investors.
Purchased well below replacement cost, the asset is a high quality A grade commercial office sitting opposite Musgrave Park. With amazing sight lines that are unable to be built out, a corner location and longer term height potential, Forza Capital believes the asset will be well sought after in years to come.
The Fund is currently providing investors cash distributions of 6.0% per annum and this return is expected to be highly tax advantaged given depreciation benefits.
- Date April 26, 2019
- Tags Operating Investments