A LANDLORD and tenant appear to have found common ground by partnering in the $70 million acquisition of The Rocket office tower at Robina.
The deal, which is one of the largest office transactions on the Gold Coast since 2007, was flagged in August and has just become unconditional.
However, it has now been revealed that Sentinel Property Group has teamed up with northern NSW funds manager Clarence Property Group to snare the property in a 50-50 joint venture.
While it is the first entry to the Gold Coast market by Sentinel, which is said to have cast its eye over the Oasis shopping centre at Broadbeach last year, the deal marks an expansion of Clarence's property interests in the city.
Sentinel managing director Warren Ebert says his company's relationship with Clarence strengthened when it was a tenant in its formerly Clarence-owned head office at 307 Queen Street in Brisbane's CBD.
"They were a very good landlord, honest and commercially-focused and I felt that The Rocket could benefit from the same style of active hands-on management," says Ebert.
"It was also a logical partnership for us as Clarence Property Group has an office on the Gold Coast.
"We have identified the Gold Coast as a key market where we want a strong presence in order to benefit from its future growth, which is already on show in the new wave of tourism, infrastructure and high-end residential and hotel developments under way.
"In partnership with Clarence, we are pleased to be securing one of the best commercial properties in the region."
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 is Slater & Gordon, WMS Solutions, Members Alliance, Evocca College and Guvera, and total occupancy sits above 92 per cent.
Robina has an office vacancy rate of 4.6 per cent, well below the Gold Coast average of 15.2 per cent.
Clarence Property's managing director Peter Fahey says the company's decision to acquire a 50 per cent stake in The Rocket reflected strong market conditions at Robina.
"Clarence has a positive view of the Gold Coast market broadly, but has identified Robina as an outperformer in terms of vacancy rates and growth potential, which is what led our decision to invest in The Rocket," says Fahey.
"This latest acquisition means Clarence now has a cluster of commercial assets in Robina, including The Rocket, Lakehouse Corporate Space business park, Easy T Shopping Centre and the recently purchased Bell Central Shopping precinct at Mudgeeraba.
"Clarence Property's portfolio now boasts more than 20 commercial and retail properties and residential developments spanning from Airlie Beach to Port Macquarie with assets of $300 million together with a $300 million development pipeline."
Sentinel Property Group's portfolio of 35 properties, including retail, industrial, office and land, is worth about $1 billion.
Robina Group director Tony Tippett revealed that The Rocket was placed on the market after approaches from potential purchasers. Market sources had expected the tower could fetch as much as $80 million.
The deal, which comes on the heels of the nearby Foxtel building selling for $46 million in April, has been struck on a yield above 9 per cent.
Sentinel is acquiring the asset through its Robina Office Trust, which forecasts a minimum investor distribution of 9.5 per cent in the first year, while Clarence will roll its share of the office tower in its flagship Westlawn Property Trust.
The sale was negotiated by Mark Witheriff and Tania Moore, of Knight Frank.
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