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Petrol king and property investor Nikos Andrianakos has grown his family’s property portfolio with the purchase of an office complex on the fringe of the Brisbane CBD for $85.2 million.
The campus-style offices at 19 Lang Parade in Milton comprise two buildings with a net lettable area of about 13,800 square metres.
Tenants include MHPS Plant Services and the Presbyterian Church of Queensland, with a weighted average lease expiry of 2½ years.
“There’s a lot being spent on infrastructure in Brisbane and we see that market, although it has been oversupplied, we see it improving,” said Paul Lachal, investment manager at Nikos Group.
“It’s also about the diversification of our assets. It’s hard to buy those kind of office buildings in Melbourne and Sydney.”
The off-market transaction, struck on an initial yield around 8 per cent, comes two years after the owner, developer Franco Di Bartolomeo, first tried to sell the building through Cushman & Wakefield’s Mike Walsh and Peter Court. It’s understood they were also the agents involved in brokering this recent deal, but calls were not returned.
Since then, Brisbane’s fringe office market has been undergoing a noticeable recovery.
The vacancy rate in Milton fell from 27.9 per cent to 17.5 per cent over the year to July, according to data from the Property Council. Milton, which makes up almost 20 per cent of the total fringe office market in Brisbane, has become an alternative option to the CBD for tenants looking for large floor plates and better value.
Investors have been betting big on the broader recovery going on across the Brisbane market with a falling vacancy rate, solid net absorption, and a $15 billion infrastructure boom currently under way.
Last year, following the $90 million acquisition of the IBM Tower in Brisbane’s CBD, Centuria’s joint chief executive Jason Huljich said while Brisbane’s office market had been sluggish, he expected to see growth “ramp up” in the first half of 2020.
This is the latest acquisition by the Melbourne-based Nikos Group after it went on hiatus in 2018, when Andrianakos purchased Santos House in the Adelaide CBD from Lendlease for $101 million.
The acquisition is part of the Andrianakos family’s transition from a petrol retailer to a major property investor.
In late 2016, Mr Andrianakos, the founder of Milemaker Petroleum, sold the retail fuel business assets in Victoria to Caltex in a $95 million deal while retaining all the sites on long-term leases to Caltex.