The average lease expiry in the building, known as the Government Service Office, which includes ground-floor retail is 9.5 years. The deal was struck on a 5.3 percent initial income yield.
For Growthpoint, the building on Dandenong’s Thomas Street, will add to its growing portfolio of suburban-focused assets.
“The acquisition further increases Growthpoint’s exposure to government covenants in strategic urban locations and is a great addition to our portfolio, supporting our strategy to maintain a portfolio of modern, high-quality resilient assets which meet our tenants’ needs now and into the future. Managing director Timothy Collyer said.
Dandenong has already absorbed the benefit of $ 700 million in urban renewal investment, Mr Collyer noted.
Another $ 1 billion more in private sector investment is expected to follow state government initiatives to boost the suburban hub, while federal spending on infrastructure in the south-east will further improve transportation connections, he said.