QLD health building at herston sells

HEALTH sector office properties are showing high yields of more than 7 per cent, with a $67.5 million sale of a Herston office block near the Royal Brisbane Hospital.
Mirvac Domaine sold the property on 15 Butterfield Street in Herston to private investment group Bergh Pty Ltd.

Jones Lang LaSalle’s Ben McGrath — who was involved in negotiating the sale – says the deal gives strong underlying evidence of the continued strength in the Brisbane’s office market, despite the difficulties being faced by financial markets.
“The initial yield on the sale at 7.8 per cent, given current market conditions, is a very strong result,” says McGrath.

“The building in Butterfield Street is an 11,200sqm office development, pre-committed entirely by the Queensland Department of Health on a seven plus seven year lease.
“Newer buildings fully leased to a blue chip tenant such as the State Government are now seen as premium stock.”

But it is not only properties with government leases that have been performing well.
A 193sqm Logan private medical office recently sold at an auction for well above the reserve price.

Dr Peter Elliott and wife Marion sold their accredited day surgery and skin care clinic to private buyers for $650,000, representing a yield of 7.4 per cent.

Agent Ray White has reported that investors are looking for safe long-term, passive investments with established tenants. The Logan property was bought with a new 5 x 5 x 5 lease.

Ray White Commercial Springwood’s Silvio Bevacqua has witnessed a substantial increase in activity in the market, particularly for buying and leasing within the Southside corridor.