Northbourne Avenue public service office hub in Canberra hits the market

Another public service building is for sale as investors take advantage of the strength of Canberra’s commercial property market. 

Owner Credit Suisse Real Estate Investment Management is selling the seven-storey office building at 62 Northbourne Avenue, which houses the federal Department of Infrastructure.

Situated in the heart of the city, across from the Jolimont Centre, the tower is fully leased to the federal government.

Credit Suisse Real Estate Investment bought the tower for $38 million in 2009. It is reportedly looking to sell the building for close to $60 million.

It comes two months after neighbouring Infrastructure House at at 111 Alinga Street hit the market.

CBRE’s Mark Hansen, Andrew Stewart and Richard Butler are marketing 62 Northbourne Avenue through an expressions of interest campaign.

Mr Stewart said the sale came as Canberra welcomed stability in the office leasing market. 

“With the federal government having gone through a period of consolidation of its existing leasing portfolio, which it has now stabilised,” Mr Stewart said. 

“Vacancy rates for A-grade stock in Canberra’s CBD have dropped to below 5 per cent based upon the PCA’s [Property Council of Australia] latest market outlook.”

Mr Hansen said Canberra was a safe haven for investors, having always attracted offshore interest.

He said secure investment opportunities in proven locations would continue to be hotly contested in the wake of global economic volatility. 

“Because of the stability of tenure, fixed reviews and long-term leases that the Commonwealth government provides, we expect this property to attract the interest of a number of investors seeking security of this type in the current economic climate,” Mr Hansen said. 

Mr Stewart said investors seeking assets outside of Melbourne and Sydney has spurred a strong period of activity in the Canberra market. 

“Canberra has seen some significant yield compression in the past two years, with it seen as the next go-to market, offering a stable economy and strong tenancy profile in many assets,” Mr Stewart said. 

“This is a significant asset in the Canberra market and very well located in the main north-and-south corridor, with excellent access to the city retail precinct and immediately adjacent to the proposed light rail project.”

The A-grade building has a five-star NABERS rating, basement parking for 109 cars and excellent natural light. Lighting, chillers and boilers were refurbished in 2007.