Recent start-up Impact Investment Group is proving one of Melbourne's most active property investors, sealing an off-market deal on Tuesday to acquire the headquarters of the Transport Accident Commission in Geelong.
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The 60 Brougham Street office changed hands for $95.8 million on an initial net yield of about 7.5 per cent and is the eighth syndicate arranged and co-invested in by IIG since it launched in early 2013.
IIG chief executive Christopher Lock said the purchase was an "extremely rare opportunity that aligns with our strategy to provide investors with robust returns that are enhanced and strengthened by our strong environmental and social agenda".
The TAC established its headquarters in Geelong in 2009 in a purpose-built office following a controversial decision that required the department's entire workforce to relocate from Melbourne.
The then Labor-led state government based the move on a one-month feasibility study which suggested it would result in a net $141 million economic boost to the region.
The seven-storey, A-grade commercial office has a 5-star Green Star rating and 5-star NABERS rating. It has an enviable location at the northern end of Geelong's waterfront CBD with nine ground-level retail tenancies and secure undercover car parking over three levels.
IIG will hold the property in a single-asset unlisted investment trust with investors forecast to receive quarterly distributions of about 10 per cent per annum, Mr Lock said.
The TAC property is the largest syndicate organised by IIG, which is owned by Mr Lock and Small Giants, the family office of Daniel Almagor and Berry Liberman.
Other assets purchased by IIG include the December 2013 purchase of the Carlton office of the Environment Protection Authority which it sold this year for an $8.7 million gain.
The group has also set up an IIG Wind Trust fund to part-finance the construction of a new three-turbine wind farm in Chepstowe, east of Ballarat. It has also launched a fund raising for a $250 million Solaire Income Fund which will focus investment on solar power purchase agreements.
The TAC has a 20-year lease in Brougham Street (with 14 years remaining) and a five-year option to extend subject to fixed annual rental increases of 3.5 per cent for its full term.
