Interstate Fund Manager secures landmark Varsity Lakes office building for $32.35m
A landmark A-grade office building at Varsity Lakes has sold for $32.35 million in the biggest office transaction on the Gold Coast since 2023.
Varsity One, located at 1 Lake Orr Drive with extensive frontage along the key arterial route of Bermuda Street, has been acquired by Australian real estate funds management group Acure Asset Management which controls an existing commercial investment on the Gold Coast at Carrara.
The sale was secured following an off-market expressions-of-interest campaign undertaken by Bede Blatchford and Steven King, of Colliers, and Jack Morrison and Mark Witheriff, of CBRE.
Varsity One occupies a 7,916sqm site and has 6,066sqm of net lettable area across five levels delivering a net income of $2.89million per annum.
The $32.35 million sale represents a building rate of $5,334 per square metre and a land rate of $4,087 per square metre.
“The sale of Varsity One represents one of the biggest Gold Coast office market transactions since 2023 amid pent-up demand from institutional investors looking for opportunities in the region,” said Mr Blatchford, Director of Office Leasing & Investment Services Colliers Gold Coast
“The Gold Coast office market is among the strongest in Australia, and while that creates significant opportunities for institutional investors, a lack of supply in both new and existing properties is a frustrating reality,” said Mr Blatchford.
Mr Morrison, CBRE’s Director, QLD Capital Markets notes that the sale is significant in the context of a shortage of available assets on the Gold Coast that meet mandates for institutional investors.
“Quality properties are being tightly held and this was reflected in the significant national interest that this asset generated from prospective buyers through our campaign.”
“Over the past year market activity in the office sector has been largely dominated by low-price-point offerings which are more abundant, so for the purchaser this is a significant opportunity to gain a foothold in one of the country’s most dynamic property markets.”
Varsity One is an A-grade office building with premium finishes while offering sweeping views of Lake Orr at Varsity Lakes across to Bond University.
The property has been sold by real estate investment group Argus Property Partners which acquired the asset in 2019.
Argus’ Executive Director Nick Harris noted, “Argus Property Partners implemented an active asset management strategy, including the refurbishment of the lobby and various tenancies, re-leasing of multiple floors within the building and ultimately achieving full occupancy of the building generating an uplift in the value of the asset of approximately 30%”.
Acure Asset Management is positioning Varity One in the single-asset Varsity One Trust which will have a five to seven-year term.
“We are thrilled to have secured this prime Gold Coast asset which will provide a solid base for our latest investment trust,” said Acure Asset Management’s Managing Director, Angelo Del Borrello.
“The Gold Coast office market has strong investment fundamentals, aided by very low office vacancy rates, and a robust near-term and longer-term outlook.”
Office vacancies in the Robina-Varsity Lakes area are among the lowest of the main office precincts on the Gold Coast. The vacancy rate of 4.4 per cent is well below the Gold Coast average of 6.5 per cent, beaten only by Broadbeach at 2.7 per cent and Bundall at 3.8 per cent.
“Amid a very tight office market, premium assets such as Varsity One are attracting strong tenant interest which is reflected in recent leases secured for the property,” said Steven King, Director in Charge of Gold Coast.
“Rental rates achieved are broadly higher than those in the official Gold Coast CBD of Southport, while there is also significant room for growth as demand increases for these types of assets with larger floorplates to deliver expansion opportunities for new and existing businesses.”
Bede Blatchford notes that the Gold Coast market has experienced an increase in face rents across all grades of office assets over the past year as vacancy rates have continued to fall.
Prior to the sale of Varsity One, the biggest office transaction occurred in June 2023 comprising the sale of Wyndham Corporate Centre at Bundall for $46.25 million.