NEARLY EMPTY OFFICE TOWER SELLS FOR $5.8M

A NEAR empty office building in the heart of Southport has been snared by a Gold Coast investor for $5.8 million.

The five-level Kaybank Plaza, located at 33 Scarborough Street, was bought just days after being passed in at auction.

The sale price has been struck on an initial yield of just 0.5 per cent, indicating that the entire 2755sqm property is reaping an annual rental income of $29,000.  

The sale has been struck at a building rate of $2105sqm.

However, according to negotiating agents James Crawford and Ed Howard of Colliers International, the new buyer is planning a major refurbishment of the property.

Kaybank Plaza, developed by one of Southport's biggest landlords in the 1980s, the late Alex Katranski, has two street frontages and potential for a broad range of uses under the flexible zoning of the Southport Priority Development Area.

"The new buyer is a local investor who is reviewing various opportunities for the building but will likely reposition the building with a major refurbishment," says Crawford.

"The office leasing market has continued to improve with vacancy rates at their lowest level in eight years. The options for companies seeking 500sqm tenancies or larger are pretty slim."

Kaybank Plaza has a site area of 1591sqm and two levels of basement parking for 80 cars.

The latest deal comes on the heels of a flurry of office sales in Southport in the past six months, including Bankwest Business Centre which was sold by Crawford for $8.3 million.

Other Southport sales include Bartercard House, at 121 Scarborough Street, which sold for $11.6 million and the Connaught Centre at 26 Marine Parade which sold for $9.7 million.

"With a strengthening leasing market and no new supply of office in the local market, buyer demand is expected to remain strong" says Crawford.