Canberra's Infrastructure House hits the market

A prominent public service building located next to Canberra’s city bus interchange and the planned light rail terminus will hit the market on Thursday.

Brookfield Office Properties is placing Infrastructure House at 111 Alinga Street on the market.

The refurbished A-grade building at the corner of Northbourne Avenue houses the Department of Infrastructure and Regional Development and could reportedly fetch $80 million to $90 million.

It offers 16,413 square metres of lettable space and comes with a weighted average lease expiry of 10 years, as of July 1.

The building also includes basement car parking and comes with a five-star NABERS energy rating.

JLL has been appointed to sell Infrastructure House, with international expressions of interest closing on June 16.

JLL ACT head of sales and investments Michael Heather would not comment on the sale but said the proposed light rail terminus at Alinga Street would ensure the area became the city’s central hub, “unlocking [its] potential”.

On Tuesday the ACT government signed a $710-million light rail contract with Pacific Partnerships-led consortium Canberra Metro to build and operate the tramline.

Capital Metro Minister Simon Corbell said the design of the city terminus had been “enhanced” to become a key meeting place, while a new $7 million public square would be built on the Northbourne median between the Melbourne and Sydney buildings. 

The major sale also comes at a time when Canberra’s office vacancy rate is improving.

Mr Heather said JLL had recorded a net absorption of 13,700 square metres of Canberra office space in the first quarter of 2016, with the sub-leasing vacancy rate trending down to 0.7 per cent.

“The Canberra A-grade office market recorded a vacancy rate of 7.4 per cent in the first quarter which is the second tightest of any JLL-monitored CBD office market in Australia for A-grade stock,” he said.

“The news is even better for the A-grade vacancy in Civic which is even tighter at 4.9 per cent.”

Mr Heather said institutional and offshore investors were reassessing Canberra as a worthy investment.

“This is also supported by the current spread between office yields in Canberra and the real risk-free rate which is significantly wider than historical benchmarks,” he said.