The building that houses ACT Health’s headquarters in Woden has changed hands for $84.6 million, underscoring the strength of Canberra’s office market and the attraction of the growing Town Centre.
ASX-listed real estate investment trust Growthpoint has acquired the six-storey office building at 2-6 Bowes Street from private equity investment group Altis Property, which had held the property for four years.
Altis had paid Quintessential Equity $58.4 million for the 4366 square metre site. Quintessential picked it up for $14 million in 2012, then undertook a $10 million refurbishment and rented nearly 90 per cent of the property to ACT Health.
The property was developed in 1986 and has 12,376 square metres of lettable area across three interconnected buildings, and 86 basement car parks.
ACT Health has 9.2 years left to run on its lease, at which time it will be presented with the first of two five-year options.
The Federal Government, including its COVID response team, occupies 940 square metres (or 7.6 per cent).
Colliers International Director of Capital Markets & Investment Services, Matthew Winter said Woden’s reputation as a national health hub and the strong development outlook in the Town Centre contributed to the result.
“The acquisition of 2-6 Bowes, and also (the sale of) Scarborough House (for $83m) earlier this year, demonstrates the confidence in the Woden market and its ongoing evolution,” he said.
“The compelling infrastructure story is providing a positive long-term outlook for the precinct.”
Mr Winter said key infrastructure such as the Canberra Hospital, Westfield, future CIT campus and major occupants including Department of Health, and ACT Government underpinned the area.
“The commitment by ACT Government to major infrastructure projects to enhance Woden as well as private sector development is providing a compelling investment proposition,” he said.
Mr Winter said the sale campaign attracted strong domestic and international interest given the quality of the asset and income profile.
“The ACT office market has seen record levels of buyer participation and sales volume in 2021,” he said.
“As at July 2021 the ACT had the lowest total vacancy levels of any major Australian office market (7.7 per cent). Vacancy levels for A-grade office assets are approaching historical lows across the entire ACT market.”
Mr Winter said the Woden A-grade market had been one of the most stable across the ACT.
Growthpoint now holds $261 million in Canberra property. Mr Winter said the company had been a long-term Canberra owner and this recent acquisition highlighted its ongoing confidence in the market.
Colliers and CBRE brokered the sale.