Australian office investment trust Centuria Office REIT (COF) has sold a building in Brisbane for A$37.35m (€23m) to Exceed Capital.

ASX-listed COF bought 555 Coronation Drive, Toowong, a decade ago. It is the fourth asset that the group has divested at or close to their book values in the current financial year.

Belinda Cheung, COF fund manager, said the prices achieved reflected the value-add to the assets through a series of refurbishments and measures to improve amenity and sustainability efficiencies, resulting in strong leasing and occupancy for the buildings.

“Most of Australia’s office transactions completed in the past 18 months have been for smaller-scale assets below the A$100m threshold, demonstrating market demand and a deeper buyer pool for assets in this category nationwide,” said Cheung.

She said mid-term market tailwinds based on Australia’s population growth and falling supply of new office developments in metropolitan markets was a factor in the demand for this type of assets. 

555 Coronation Drive, Toowong

Source: Centuria Office REIT

555 Coronation Drive, Toowong

“Looking forward, development feasibilities have been impaired due to rising construction costs, increased finance costs and softening capital market transactions, pushing economic rents significantly above prevailing rents in the majority of Australian office markets, especially those COF is exposed to.”

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