28 March 2022

Molonglo sells prominent Civic office building

| Ian Bushnell
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Building in Canberra

33 Allara Street Canberra has been fully refurbished. Photo: JLL.

Innovative Canberra property investor Molonglo Group has sold its prominent eight-storey office building at 33 Allara Street in Civic.

Both Molonglo and co-agent Colliers are staying silent about the sale details until the transaction is finalised on 5 April but it is believed that the Brisbane City Investment Corporation has bought the refurbished building for $71 million.

With the Canberra office market running hot, it had been hoped that the property would bring $80 million.

Nonetheless, the result is still a good one for Molonglo which bought the property in 2015 for $29 million and intends to put the proceeds into its Dairy Road development near Fyshwick.

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“The capital from the divestment will be reinvested in Dairy Road, a 14-hectare neighbourhood we are slowly developing in Canberra’s East Lake over the next 10 years,” Molonglo director Nikos Kalogeropoulos said.

“Our vision is for a healthy, environmentally responsible and productive place where living, working, light industry, recreation and entertainment will be undertaken together in a natural setting.

“In 2021, Dairy Road was rezoned to allow for this mix of uses, enabling us to realise our vision and we have since commenced work on the masterplan for the site.”

Molonglo has spent $24 million refurbishing the A-grade building in Allara Street.

It boasts 9736 sqm of lettable space and parking for 117 cars with a combination of government, corporate and hospitality tenants, including the Murray Darling Basin Authority.

The 4.5-star NABERS energy rated building sits on a 3725 sqm site with 94 m of street frontage in City East, close to new development, major occupiers, transport, lifestyle and retail amenity.

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It is almost 90 per cent occupied and when fully leased draws a net income of $4,357,540 a year.

In 2019, Molonglo sold its landmark Nishi building in NewActon for $256 million to ASX-listed property funds manager Centuria so it could focus on Dairy Road.

Colliers International and JLL jointly marketed the property through an expression of interest process that closed on 25 November.

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