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CLARENECE Property appears to be making a solid profit from its foray two years ago into an ageing Gold Coast commercial building.
The NSW-based funds manager has sold four of 18 refurbished tenancies at Lakehouse Corporate Space for a total of $2.8 million in the first release of lots to the market.
The sales come on the heels of a $6 million refurbishment of the Robina building, formerly known East Quay Corporate Park which was developed by the Ray Group in the 1980s.
The office development, bought by Clarence in 2014 for $6.925 million, comprises 36 office suites across two buildings located on a 1.76ha lakefront site on Glenferrie Drive.
The first few sales represent a little over 20 per cent of the fund manager's total outlay at Robina, including refurbishment costs, with just 11 per cent of the strata units sold.
A fifth strata-titled office is under contract while more than half of the suites in stage one have been leased at an average gross rental rate of $400/sqm. Six have been secured by existing tenants.
Marketing agent Tania Moore, of Knight Frank, says tight vacancy rates at Robina are playing in Clarence Property's favour.
Robina/Varsity Lakes has an office vacancy rate of 6.9 per cent, well below the Gold Coast average of 13.6 per cent.
"To this end, more businesses are now looking at purchasing rather than leasing their tenancies," says Moore.
"Leases over five of the Lakehouse strata lots are to international tenants with investors able to reap the benefits of the strong lease terms secured."
There are nine suites left in the first release of Lakehouse Corporate Space. Four are being sold with vacant possession, priced from $589,200.
Clarence Property, headed by Peter Fahey, made a big splash at Robina late last year when it teamed up with Sentinel Property Group to acquire The Rocket building for $70 million.
The 16-level Rocket, built by Robina Group in 2009, is one of only a handful of A-grade office buildings on the Gold Coast. Among tenants are Slater & Gordon, WMS Solutions, Members Alliance, Evocca College and Guvera.
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