The City of Gold Coast has managed a complete buyout of the Corporate Centre office precinct at Bundall after paying $109 million for the original landmark tower from Sydney-based funds manager CorVal.
The acquisition follows the Gold Coast council’s $46.25 million deal in 2023 for the Wyndham tower on the western side of the precinct.
The latest deal marks a complete exit of the Corporate Centre property for CorVal which acquired the asset from Cromwell Property Group (ASX: CMW) in 2017 for $89 million.
Corporate Centre One, which has a high-profile position at the corner of Bundall Road and Slatyer Avenue, was developed more than 30 years ago by the Raptis Group (ASX: RPG) and comprises 11,500sqm of office space with the total site occupying 2.26ha.
The tower, which currently has 37 tenants, including CBA, Findex and KPMG, has been acquired by the City of Gold Coast to meet its own future needs for office space.
In the meantime, the council says the Corporate Centre assets “generate significant annual net revenue, ensuring the acquisition is a favourable short- to mid-term financial investment for the city”. The properties generate rental income of $6 million a year.
“This is a fantastic outcome for the people of the Gold Coast,” says Gold Coast Mayor Tom Tate.
“We have secured a key piece of strategic real estate that not only safeguards the Council’s long-term accommodation needs but also delivers strong, ongoing financial returns that will benefit our community for years to come.
“This is about future-proofing the city’s operational needs and strengthening our investment portfolio in one of the most constrained and highly sought-after commercial markets in the country.”
While the purchase price was $109 million purchase price, which was exclusive of GST, the cost to the council for the acquisition is $117 million when including stamp duty and due diligence costs.
“This transaction represents the largest office transaction ever on the Gold Coast and is testament to the City of Gold Coast’s forward thinking in securing a key office investment asset with a huge surplus land holding, allowing for a multitude of future uses,” says CBRE’s Mark Witheriff, who negotiated the sale along with colleague Jack Morrison.
“CorVal has been an extremely active manager of the asset over its period of ownership, taking the building from carrying long term 20-30 per cent vacancy to effectively fully occupied.”
Occupancy at the Corporate Centre has benefited in recent years from strong demand on the Gold Coast amid dwindling supply.
“The Gold Coast office market continues to be one of the strongest performing in the country with low single digit vacancy and strong year on year rent growth,” says Witheriff.
“With construction prices continuing to make new office development extremely difficult and creating a lack of supply, this trend is set to continue in the medium term.”
The Corporate Centre sale delivers on CorVal’s original plans to sell off the asset in separate lots to enhance investor returns.
“The sale of this final component of the Corporate Centre provides our investors with a return well ahead of the initial underwrite and over a period where office investments have faced numerous challenges,” says Oliver Picone, the chief investment officer at CorVal.
“The success of this investment demonstrates our team’s ability to acquire assets well, implement active asset management strategies and achieve strategic exits of assets when appropriate.”
CorVal, which was founded by Rob Rayner and Ian O'Toole in 2009, is a specialist property investor that is backed by rich-lister and property industry veteran Andrew Roberts.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support