Fund Summary
3-7 Hamilton Street, Mont Albert (“the Property”) is a six level commercial property consisting of three floors of office with a Net Lettable Area (“NLA”) of 3,720m² and 114 car park spaces over 3 basement levels. It is located in a leafy residential suburb 12km to the east of the Melbourne CBD. Sold effectively vacant, Forza was able to substantially de-risk the investment by executing two major leases prior to settlement.
The Forza Mont Albert Fund is an unlisted property fund which acquired a recently refurbished 3,720m² commercial office building residing on a freehold land parcel of 1,585m² with 114 basement car parks. The Property is located in the heart of Mont Albert Village, 200 metres from the train station and 1km from Box Hill and Surrey Hills and 12 kms to the east of the Melbourne CBD.
The Property was 71% vacant, with a WALE by area of 0.23 years, which drove the significant adjustment in valuation. Forza was able to substantially de-risk the investment by executing two major leases prior to settlement. This resulted in a substantial valuation increase prior to settlement occurring.
The top floor lease was extended by 5 years and on Level 1 a new 10.5 year lease was signed with a local accounting firm. Since settlement of the asset, the vacant ground floor has been completely refurbished which has resulted in strong leasing traction such that only 187m², of 5% of the NLA, remains vacant.
The Property was 71% vacant, with a WALE by area of 0.23 years. Executing two major leases prior to settlement substantially de-risk the investment and resulted in an immediate valuation increase. Active management since settlement has seen further leasing take the occupancy up to 95%.
The purchase price was at, or below, its underlying land value. Arguably the property is worth as much as a vacant land site as it is a fully leased office asset. The property was acquired for $15.5 million, a 45% discount to the $28.3 million the vendor acquired the asset for in 2021. Included in the purchase price is a rental guarantee of $1.1 million which covers the vacancy across the ground floor and the period until Level 1 rent commences.
