Woden's Aviation House sells for $68.1 million

The benchmark has been set for Canberra’s biggest office sale of the year with Woden’s Aviation House selling for $68.1 million on Monday.

Mirvac sold the nine-storey office building on Furzer Street to a Queensland-based private investor through Colliers International and JLL via an expression of interest process.

The building houses three federal government tenants: the Civil Aviation Authority, Australian Public Service Commission and the Department of Social Services.

Colliers International’s national director of capital markets Tim Mutton said the 14,812 square metre asset attracted both local and international interest from investors focused on the eastern seaboard’s metropolitan markets.

“Similar to what we saw with the sale of Louisa Lawson building last year, Canberra is attracting maiden investors who are finding that supply is becoming increasingly scarce in the Sydney and Melbourne major office markets,” Mr Mutton said.

Mr Mutton said the sale was great news for the Woden Town Centre, which houses about 130,000 square metres of office space occupied by government tenants.

“Major office buildings with Commonwealth leases located in our town centres are seen as attractive investments as the Australian government considers local impacts before moving tenants, which we’ve recently seen with Customs and Border Protection staying in Belconnen,” Mr Mutton said.

JLL ACT’s head of sales and investments Michael Heather said the sale demonstrated the scale and depth of Canberra’s office market.

“Canberra actually ranks as the third largest prime grade office market in Australia with the Federal and ACT governments as major occupiers of stock in Canberra,” Mr Heather said.

Mr Heather said major national and global firms sit alongside these government tenants, providing diversity to the client base.

Aviation House boasts a 100 per cent occupancy rating from it’s three AAA-rated Commonwealth of Australia tenants.

Mr Heather said the asset’s sustainability credentials and low ongoing costs were also key factors in the success of the sale.

Aviation House has a weighted average lease expiry of about five years and a 4.5-star NABERS energy rating.

According to Colliers International research, four major office buildings have sold in Canberra so far this year for a total of $152.325 million, three of them were situated in the CBD and sold in April.

Australia Place at 14 Mort Street sold to an interstate investor for $41.5 million.

Another major city sale was recorded when a seven-storey building at 73 Northbourne Avenue in the city sold for $29.2 million.

Eclipse House, an 11-storey office building slated for a $40 million hotel transformation, sold for $13.525.

Mr Mutton said he expects a further four major office buildings will change hands before the end of the year.