- Elanor has entered into an agreement to purchase the Surfers Paradise Office
- GDI Property has exchanged contracts to sell 50 Cavill Ave
- The purchase price was $113.5 million
Set just 500m from the beachfront in Surfers Paradise, 50 Cavill Avenue has been sold by GDI Property Group (ASX: GDI).
Having exchanged contracts for the property, the sale was for $113.5 million, GDI said that after selling costs and other settlement adjustments, the company expects to net $109 million, representing an $8 million premium to the 30 June 2020 carrying value.
GDI purchased the property back in February 2016 for $48.75 million, approximately $46.1 million net of adjustments. The building was extensively refurbished, previously 54% of the building was occupied and the building had no NABERs Energy rating. It is currently rated 4.5 stars and 97% occupied.
This was an examplar of what GDI does best, said Steve Gillard, GDI managing director:
“We realised that 50 Cavill Avenue could be the preeminent business address on the Gold Coast. We identified opportunities for capital expenditure to improve the asset’s appeal, reduce its operating costs and improve its environmental performance. We were confident that if we did this the occupier market would follow, and we are very pleased with our successes on all these facets.”
Elanor Commercial Property Fund (ASX: ECF) has entered into an agreement to acquire the 50 Cavill Ave property, the acquisition representing a passing yield of 7.0% and a capitalisation rate of 6.8%. Settlement is expected at the end of this month.
“The performance of ECF during FY21 has been exceptionally strong in challenging market conditions. The acquisition of 50 Cavill Avenue further enhances the Fund’s portfolio of high investment quality commercial office properties invested in favourably positioned markets,” said Glenn Willis, Elanor Investors Group (ASX: ENN) CEO.
ECF will partially fund the acquisition via a fully underwritten $84.7 million equity raise at $1.10 per security.
The offer will include a 1 for 5 Accelerated Non-Renounceable Entitlement Offer to raise $45.0 million, and an Institutional Placement to raise $39.7 million.
The remainder will be funded by debt, and Elanor has agreed terms in respect of a new $39.7 million debt facility. The new debt facility has a 5-year term and forecast all-in cost of 2.3% per annum on a fully hedged basis.
ECF’s preliminary FY21 results highlight includes funds from operation per security of 12.54 cents (20% higher than PDS forecast), distributions per security of 10.03 cents, a portfolio value of $384.5 million, net tangible assets per security of $1.22, and gearing of 35%.