Woden office building leased by ACT Health sells for $84.6m

2-6 Bowes Street, Phillip has sold. Picture: Supplied

A government-leased commercial office in Woden Town Centre has changed hands for $84.6 million.

Growthpoint, a real estate investment trust listed on the ASX, will acquire the office building at 2-6 Bowes Street, Phillip, less than three months after it hit the market.

The six-storey office building is 96 per cent leased by government tenants including the ACT Government Health Directorate and offers a weighted average lease expiry (WALE) of 9.2 years.

MORE PROPERTY NEWS:

• Home across from The Lodge sells for $4.4m in record auction weekend
  
• Iconic 30-room manor for sale
  
• Six regional locations where you can buy with a $100k deposit or less
  

The deal was brokered by CBRE's Nic Purdue and Michael Andrews, with Colliers as a joint agent.

Mr Purdue said the campaign attracted some of the strongest investor interest he'd seen in Canberra all year.

"We had a lot of domestic interest but we also had plenty of interest from markets like Singapore, Hong Kong ... investors based in mainland Europe around the Netherlands and Germany as well. So quite a strong pool of buyers that were looking at this," he said.

In addition to a long WALE and 5 per cent income yield, the quality of the office was also an appealing factor for Growthpoint, which also owns 10-12 Mort Street and 255 London Circuit in Civic.

In an ASX statement, Growthpoint managing director Timothy Collyer said, "We are pleased to have exchanged contracts to acquire an A-grade office asset in the ACT, with high occupancy and a long WALE, increasing our investment in this market to $261 million."

The transaction comes just one week after another major office sale, when Charter Hall and Singapore-based investment company GIC co-purchased 50 Marcus Clarke Street for a record-breaking $335 million.

"The Commonwealth government as a major occupier in Canberra has driven a lot of the interest in our office market but it's also the quality of the assets," Mr Purdue said.

"Canberra's economic fundamentals are attractive and appealing to investors as well. They see we've got a pretty low unemployment rate, reasonably strong GDP numbers, strong house price growth. So there's a lot of economic fundamentals that tick the boxes for some of these investors."

Matthew Winters of Colliers said Canberra is experiencing its strongest year of commercial office sales.

"[The sale] caps off a record year for Canberra's office market, now surpassing about $1.4 billion worth of transactions, nearly doubling our former record year of 2019," he said.

Mr Purdue said strong transactions such as this one and the recent sale of Scarborough House are a boost of confidence for the Woden Town Centre in particular.

"There's some really strong, compelling reasons for buyers to be looking at the Woden Town Centre at the moment ... it's getting a huge amount of infrastructure spend and there's a lot of mixed-use development that's happening in and around the town centre as well," he said.