Government-leased Hobart office building sells for $28m+

Melbourne, Australia – A modern office and warehouse facility in Hobart, fully leased to the Tasmanian State Government, has sold for $28.05 million in one of the largest commercial property transactions in the local market this year.

The property at 89 Cambridge Park Drive in Cambridge, located just 10 minutes east of Hobart’s CBD, was purchased by interstate investor reflecting an initial yield of 7.15%.

The sale was negotiated by Knight Frank agents Tom Ryan and Trent Preece in conjunction with Scott Newton and Richard Steedman of Elders Commercial on behalf of the vendor, Kinkora Investments.

The Cambridge asset comprises a modern single-level office and warehouse facility with a total lettable area of 6,897sq m, including 5,910sq m of office accommodation and a 987sq m warehouse, on a substantial 28,080sq m corner site with 163 car parks.

It is fully leased to the Tasmanian State Government across two major departments - the Department of Health (represented by Ambulance Tasmania & Care@Home) occupies 68% of the building, while the Department of Justice (WorkSafe Tasmania and CBOS) occupies the remaining 32%.

Knight Frank’s Tom Ryan said the Expressions of Interest campaign for the property generated 132 enquiries and eight formal offers, attracting interest from a broad mix of local and mainland private investors, smaller listed property trusts and syndicator groups.

“It was a highly competitive sales process, and the transaction, which is one of the largest in Tasmania this year - highlights the strong investor appetite for government-backed assets in Tasmania,” he said.

“Buyers were particularly drawn to the strength of the tenant covenant and secure income underpinned by essential public services, with a long lease in place to the Tasmanian State Government and a WALE of 10 years.

“The campaign also reinforced the growing appeal of Tasmania's office market, where vacancy remains low and new supply is limited, creating strong fundamentals for long-term investors.”

Elders Commercial’s Scott Newton said the quality of the asset was another major factor driving buyer interest.

“89 Cambridge Park Drive is a modern, well-maintained property that requires limited forecast capital expenditure, which is becoming increasingly important for investors in the current market,” he said.

“The building offers high-quality accommodation that has been purpose-fitted by its government occupiers, while the substantial site and strategic location within the Cambridge precinct further enhances its investment credentials.

“Cambridge is an established government and commercial precinct close to Hobart International Airport and the rapidly expanding Eastern Growth Corridor.

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For further information, please contact:
Vanessa De Groot – Marketing & Communications, Knight Frank
Vanessa.degroot@au.knightfrank.com +61 410 460211

Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, the Knight Frank network has 600+ offices across more than 50 territories and more than 20,000 people. The Group advises clients ranging from individual owners and buyers to major developers, investors, and corporate tenants. For further information about the Firm, please visit www.knightfrank.com.