- The government anchor tenant vacated in March this year.
- A recent leasing deal brought occupancy up to 97%.
- Office vacancy for the Gold Coast is expected to drop to 2% by the end of 2025.
A Gold Coast office, known as The Atrium, has been acquired from offshore vendor, Jingfei Huang, for $11.4 million.
Located at 15 Lake Street, Varsity Lakes, the acquisition was made by a joint venture of Alceon and Bricktop Group.
“In the current construction environment, The Atrium was a compelling opportunity for us, as the purchase price is more than 50% below replacement cost at $3,100 per square metre,” said executive director of Alceon Queensland, Todd Pepper.
Purchased on a majority vacant basis
The three-level office building is located within the Bond University Education precinct, and is the fifth commercial asset acquired by Alceon on the Gold Coast. It includes 162 onsite car parks, and improvements are expected to be made.
The Atrium was constructed in 2007, and is currently tenanted by Jetts Fitness, LINK Business Brokers, and Gold Coast Medical Precinct Varsity Lakes.
Alceon and Bricktop Group acquired the property on a majority vacant basis after the federal government anchor tenant vacated the building in March this year; the office was previously 44% leased by Services Australia (Centrelink), who occupied 3,750 square metres (sqm) of the building.
“After Services Australia vacated the building in March this year, we acquired the property on a majority vacant basis, with the capability to enhance the income up to $1.7 million net per annum,” added Pepper.
Quickly increasing the occupancy
The joint venture has now taken the property to 97% occupancy on a 7.5-year WALE, following the signing of a 10-year lease with an expanding education provider across 2,150 square metres of the building; the partners are confident of achieving full occupancy within the next 12 months.
“We have so far leased over 18,000 sqm of education space over the past five years in southeast Queensland,” said Alceon Queensland director, Tim Farquhar.
“Over the longer term, The Atrium represents an opportunity for us to convert this building into a social infrastructure asset to meet significant backfill demand for education within the local area from vocational, ELICOS (English-language course), and ancillary care providers.”
Favourable market conditions are buoying the joint venture’s confidence, with the current six per cent office vacancy rate on the Gold Coast expected to fall to two per cent by the end of 2025.
“The speed with which the new buyers were able to secure a new tenant for the building reflects not only rising demand from a resurgent education sector, but the underlying demand for premium office space on the Gold Coast,” said Colliers‘ Gold Coast director in charge, Steven King.
“The sales campaign for this office property drew a strong field of prospective buyers looking to lock into prime opportunities that the Gold Coast market continues to offer on the back of sustained population and business growth across the city.”
