Sold: $48m tax office return

THE Australian Taxation Office’s Albury headquarters has been sold to a Sydney-based property fund manager in a history-making deal less than six weeks after staff moved into the building.

The $48 million sale by David Harper’s Volt Lane Pty Ltd’s to CorVal Partners coincided with the building’s official opening yesterday.

It is considered to be the biggest commercial property sale in the city’s history and one of the largest in regional Australia.

The deal was brokered by Colliers International with a final settlement reached last week.

The seven-storey property in Smollett Street was placed on the market in August and the 15-year lease with the Australian Taxation Office sparked interest globally.

Mr Harper said yesterday it hadn’t always been the intention to sell the property.

“We hadn’t made up our minds about how we would approach it,” he said.

“But over time it suited us to do that.

“There are not a lot of brand new premium buildings in the country like that.”

The Australian Taxation Office also has a 10-year option on the property.

Colliers investment services director Tim Mutton said the tax office’s commitment was attractive to investors.

“In the end we had five parties interested and three of them were all at the same price,” Mr Mutton said.

“The attraction for that asset is the Commonwealth of Australia is underwriting the rent.

“The only issue is they have got to run some capital expenditure to keep it up to scratch.

“It is a very safe investment because there are going to be minimal issues in the first few years with a long-term secure cash flow.”

Mr Harper’s building arm, the Doma Group, purpose-built the property with a 5-star green rating.

The tax office occupies 95 per cent of the total leased area with the building also incorporating two retail tenancies on the ground floor.

One has been leased to a cafe operator and the other is yet to be snapped up.

Rent for the tax office and ground floor tenancies will be $4.15 million per year.

“The sale of the Albury ATO building confirms what we’ve been saying in the market place,” Mr Mutton said.

“There is a flight to quality and above all else the ability of an asset to attract secure long-term cash flow is king.”

Mr Harper is also developing the Volt Lane Markets retail area beneath the multi-deck car park as part of the overall $53 million redevelopment of the area.

“The developer is confident enough to start,” he said.

“It is one of those things where you build it and they will come.”

A $20 million 120-room hotel is also being built by Pacific Accor next door to the Australian Taxation Office building.