Plan for unlocking Bundall site value
THE buyer who has just paid $89 million for Bundall’s Corporate Centre is in no rush to start developing the site’s surplus land.
Sydney funds manager Corval has bought the twintower centre from Cromwell, a listed property group.
Cromwell, ahead of marketing the property earlier this year, applied for approval for a $1 billion master-planned and staged retail and residential project on undeveloped areas of the 5.64 hectare site.
Corval director Ian O’Toole said that initially Corval needed to sit and learn about its new asset.
“We have to work out the best way to manage it and to unlock value out of the unutilised land.”
Corval, managing a $1b worth of properties on behalf of investors such as institutions and high net worth individuals, settled the purchase of the Corporate Centre after weeks of due diligence and is putting the property into an unlisted syndicate.
Mr O’Toole said the Corporate Centre had been bought at a discount to replacement cost.
Corval was drawn to it by the price differential that existed between the SydneyMelbourne markets and the Gold Coast.
Mr O’Toole would not reveal the yield Corval had bought the Corporate Centre on, other than describing it as “a good one” that eventually could rise to “north” of nine per cent.
“I understand we were not the highest bidder but we were the most bankable. We were able use more equity than debt.”
John Muchall, JLL valuations director on the Gold Coast, yesterday said Corval had bought the centre’s two office towers at well below replacement cost.
”There’s potentially big upside from the centre’s surplus land.”
Seller Cromwell has owned the Corporate Centre twice, doubling its money a decade ago by selling it for $106 million and making $25 million on its latest exit.
The Corporate Centre’s 17level first office tower, complete with blue glass, was built by the Raptis Group and completed in 1990.
The property was sold to a Malaysian group for $28 million in 1993 and in 2005 it was on-sold to Cromwell for $52.86 million.
Cromwell accepted a $106 million offer in 2007 from the Trident Group, which proceeded to spend $35 million building a second tower, the Wyndham Corporate Centre.
Funder the Bank of Scotland triggered a sale of the property in 2011 and Cromwell won it with a $64 million offer.
This time around it was landlord to not one, but two office towers.