Airport Group sells Constitution Place office building

One of the two buildings in the award-winning Constitution Place precinct in the city has been sold for about $275 million to an investment fund.

Investa Commercial Property Fund bought the five-storey, 22,300 square metre office building at 220 London Circuit, which is leased to the ACT Government until 2041.

Capital Estates Development, owned by the Canberra Airport Group, completed the $300 million development in 2021.

The 12-storey second building is home to offices, an Adina Hotel and ground floor retail and hospitality businesses.

Canberra Airport CEO Stephen Byron said the sale proceeds would go back into the business.

“Selling a portion of this development eases the financial strain COVID has placed on our aviation and property businesses,” Mr Byron said.

But the company would retain the other building and work alongside Investa to fulfil the potential of the precinct.

“We are very much committed to creating exceptional developments and infrastructure for our home city of Canberra,” Mr Byron said.

ICPF fund manager Brendan Looby said 220 London Circuit was a prime asset in a highly desirable location.

“The acquisition delivers on ICPF’s strategy of owning prime assets with leading ESG [Environmental, Social and Governance] credentials in core locations, delivering solid rental growth.” Mr Looby said.

“The AAA rating of the major tenant, the ACT Government, enhances the quality of underlying earnings and improves portfolio occupancy, WALE [weighted average lease expiry] and diversification while complementing the fund’s active development pipeline,” Mr Looby said.

The building also includes seven retail tenancies, including a restaurant and gym, end-of-trip facilities, and basement parking for about 400 cars.

It is designed to achieve a 4.5 Star NABERS Energy Rating and was one of Canberra’s first WELL-rated buildings, achieving Gold Certification under the WELL Building Standard.

Head of investment management at Investa Jason Leong said the Canberra office market continued to be resilient and underpinned by solid market fundamentals.

He said Canberra had the lowest vacancy rates across the capital cities and steady rental gains, particularly over the past 12 months.

“Providing our investors with a diverse portfolio that gives exposure to office markets in key geographies, delivering secure cashflow is a core part of ICPF’s strategy,” Mr Leong said.

Constitution Place recently won three awards at the Australian Institute of Architects awards for Commercial Architecture and Urban Design and is shortlisted for the national award.

It also was the 2021 ACT Master Builders Project of the Year.

Colliers’ Paul Powderly, who brokered the sale to ICPF, said it presented a high-quality investment opportunity in the heart of Canberra’s CBD.