News

Further office leasing success in Brisbane

14 October 2014

Growthpoint is pleased to announce the execution of three new leases at its A4 and CB1 Buildings in South Brisbane and 333 Ann Street in Brisbane.

Key details of the three new leases:

Building A4, 52 Merivale Street, South Brisbane CB1, 22 Cordelia Street, South Brisbane 333 Ann Street, Brisbane
Premises Part Level 6 Level 1 Level 8
Tenant Urban Circus Pty Ltd Integrated Clnical Oncology Network Pty Ltd Everyday Hero Pty Ltd
Area 622 sqm 1,395 sqm 867 sqm
Lease term 6 years 8 years and 7 months 5 years
Commencement date November 2014 October 2014 January 2015
Renewal options 1 x 5 years 1 x 5 years 1 x 5 years
Rent (per sqm per annum) $560 gross $550 gross $489 net
Fixed annual rent increases 4.00% 3.75% 3.50%

 

Incentives for these leases were at or below market and have been taken as a mixture of rental abatement and fit-out costs. The leases were conducted via leasing agents.

As a result of the above leases, the lease renewal at 12-16 Butler Boulevard, South Australia announced to the ASX on  25 September 2014 and the sale of 42-44 Garden Street, Kilsyth announced to the ASX on 30 September 2014, Growthpoint's weighted average lease expiry (WALE) at 31 October 2014 will be 6.7 years. In addtion, Growthpoint has only 4% of leases1 expiring during this financial year, down from 5% at 30 June 2014, and only 9% of Growthpoint's total portfolio1 is vacant or will potentially expire over the next two financial years.

Growthpoint completed the acquisition of the CB1 and CB2 Buildings at SW1, South Brisbane in February 2012. Since acquisition, Growthpoint has focussed on increasing face rents and extending the WALE. As a result of these efforts, the WALE has been extended from 2.4 years to 7.5 years for CB1 and from 4.1 years to 8.8 years for CB2 and the gross face rents have increased by 10.1% for CB1 and 12.3% for CB2.

Growthpoint's Managing Director, Timothy Collyer, said:

"Since July 2013, Growthpoint has leased approximately 22,300sqm of office space in the Brisbane market, representing 33% of its Brisbane office portfolio of 67,241sqm. The Growthpoint Brisbane office portfolio enjoys a weighted average lease expiry or WALE of 5.8 years and a current occupancy of 94%. Whilst Brisbane is a challenging office market, Growthpoint's quality A-Grade buildings have met with good tenant demand and we have taken a pro-active and pragmatic approach to leasing.

With a WALE of 7.0 years and providing approximately $1.5 million in additional annual revenue2 growing by 3.5% to 4.0% per year, these three leases evidence Growthpoint's focus on increasing revenue, extending WALE and, ultimately, growing distributions to Securityholders."

 


 

Notes:

  1. By rental income.
  2. Before incentives and agents' fees.