A specialist office investment fund has inked a $13.6-million deal in Brisbane’s south-west, reinforcing findings of a new report showing soaring business confidence and growth in the city’s suburban office market.
Stronghold Precincts Property Fund—an open-ended, unlisted fund managed by Brisbane-based Stronghold Commercial Investments—has purchased the fully-leased office asset in the Westlink Green business and technology precinct at Darra.
The three-storey building at 1 Westlink Court is the fourth commercial asset acquired by the fund since it was launched two years ago.
With its latest purchase, the specialist suburban office fund is now the largest in Stronghold’s total portfolio under management, representing $46.4 million out of their approximately $225 million portfolio.
It is accelerating its “non-CBD” portfolio growth strategy amid a sustained surge in leasing activity as the sector continues to show its resilience.
“Premium suburban office assets have shown remarkable resilience during the pandemic, with flexible leasing formats, ample car parking, and a significant increase in new supply resulting in a flight to quality,” Stronghold’s head of funds management Bruce Anderson said.
“We are now raising capital to further enhance the portfolio’s diversification, flexibility and quality within non-metro locations of Australia’s major cities and are actively seeking new assets.”
▲ Stronghold Precincts Property Fund has acquired this property at Darra, west of Brisbane.
According to Graystone’s latest SEQ Urban Precincts Report, business confidence in the suburban office market has jumped two index points compared to the previous quarter.
The report is based on a survey of suburban businesses in the region’s three business technology precincts—Brisbane Technology Park in Eight Mile Plans, Westlink Green in Darra, and Northshore Hamilton.
Graystone director of developments and property management, Kirsty Heymink, the confidence in the suburban office sector was resulting in consistent, low vacancy rates across Graystone-managed buildings in the three precincts.
She said that while the leasing profile of suburban office parks had changed dramatically in the past year, the vacancy rate of its portfolio under management had improved to 5.8 per cent. By comparison, the most recent figures show Brisbane CBD’s vacancy rate has risen to 13.6 per cent.
“The size and nature of workspaces have changed, and we have the flexibility and scale to adapt with our tenants,” Heymink said.
“With this flexibility comes new opportunities to better understand the needs of a concentrated suburban workforce and play to our advantages of open spaces, ample parking and proximity to major transport.”
Stronghold’s Bruce Anderson said urban densification also had enabled suburban office precincts to offer the same live-work-play dynamic that was once only available in the CBD, with greater flexibility.
“While we anticipate demand for office space will return to pre-Covid-19 levels, the way these spaces are utilised will see the biggest change,” he said.
“Fundamentally, the office will need to provide flexibility not only for the business, but also their employees. The pandemic has simply sped up this trend.”
Article Source: www.theurbandeveloper.com