28 June 2022

Geoscience building sale set to smash property record

| Ian Bushnell
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Aerial view of the Geoscience Australia campus in Symonston.

The Geoscience Australia campus in Symonston. Photo: Colliers.

The Geoscience Australia building is set to be sold for a recording-breaking $370 million.

Property investment management company Charter Hall is conducting due diligence on the sale, which will add another government-leased property to its growing portfolio in Canberra.

The A-grade 31,053 sqm office building on 1.6ha at Symonston was listed for sale in February.

Its owner, German-based funds manager Real IS, paid the Motor Trades Association $234.1m for the property in 2006.

If the deal goes through, it will smash the existing office sale record of $335m for 50 Marcus Clarke Street in the city, also acquired by Charter Hall in a joint venture with GIC.

The sale is based on net passing income of $26.8m, and the price reflects a sub-7.2 per cent yield.

Charter Hall will not comment on the deal but it fits with its strategy of pursuing secure, long-lease properties.

In the past year, Charter Hall has acquired the Louisa Lawson Building (Services Australia) in Tuggeranong, ActewAGL House in the city, the Doris Blackburn Building (Services Australia) in Forrest, 24 Wormald Street, Symonston (Attorney-General’s) and 50 Marcus Clarke Street (Department of Education, Skills and Employment and the Digital Transformation Agency).

Geoscience Australia building

The Geoscience Australia building was purpose-built. Photo: GA.

The Geoscience property offered a long-term, AAA-rated income profile; fixed income growth and attractive yield; and a significant landholding positioned along major arterial roads.

The purpose-built nature of the asset for Geoscience Australia provides strong retention prospects, as well as the specialised infrastructure within the property.

Main interest is believed to have come from domestic and international capital sources, given the size and scale of the property.

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Canberra’s market is running hot and property industry sources say records have continued to fall over the past 12-24 months influenced by the ongoing compression in yields/cap rates.

Canberra also has one of Australia’s ‘youngest’ A-grade office markets with high-quality assets that cater to government and private sector requirements.

But records may be less prevalent as debt markets price in further interest rate hikes.

Insiders say it has been an historically buoyant market, and Canberra has not typically experienced this volume of assets being offered.

The election of a Labor Government, which usually expands the public service, has also boosted confidence that Canberra will benefit.

50 Marcus Clarke Street

50 Marcus Clarke Street holds the current sales record of $335 million. Photo: Supplied.

Geoscience Australia is the nation’s pre-eminent public sector geoscience organisation and the Federal Government’s trusted adviser on geology and geography.

The 24-year-old, twin complex features a main building with offices, laboratories, public areas and a library, and a support building with special storage, laboratories and workshops.

A $15 million refurbishment of the complex including the fit-out of four levels and updating Greenstar and Nabers requirements, was completed in 2019.

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The complex, which houses 1500 staff, is strategically located near Parliament and to collaborate with Australia’s top Earth sciences program at the Australian National University.

It is highly attractive for its long and secure lease, which runs until 2032.

The Commonwealth-funded building project was completed in December 1997, with Geoscience Australia occupying the site in January 1998.

Architects Eggleston Macdonald (now DesignInc) designed a building which showcases a significant number of energy-efficient sustainability features that generate considerable cost savings, including air-conditioning incorporating a geothermal heat pump system.

Colliers and JLL handled the sale process.

Settlement is believed to be late in the third quarter or early in the fourth quarter of 2022.

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they will build 50 thousand apartments on this once it is sold

Absolute con job! The Australian Government being ripped off once again.
It’s a rort!!!

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