21 HASKING STREET, CABOOLTURE
WHY BUY
Given that you trust us to manage your commercial asset, I wanted to share some insights on another investment opportunity that has just come on the market. Even if this property is not for you, I think you will find value in understanding how we assess investments to help identify the opportunities and threats that the general public might overlook.
WHAT ARE YOU BUYING? The Building What I like about this building is that it plays like a new building, even though the original structure dates back to 1991. In 2022 and 2023, both tenancies were stripped right back and rebuilt with close to $1 million in new fit-outs. That investment brought the property up to today’s government compliance standards, fire systems, disability access, the works. A clean building inspection confirms there are no issues and no asbestos. Secure basement parking has been upgraded with swipe-card access, 24-hour lighting, and lockable bays. To future-proof, 10 EV charging stations have also been installed. Certification is watertight, and that’s critical, government tenants won’t even consider uncertified buildings. The Tenants From my perspective, the real strength here is the quality of the covenant. Both Youth Justice and the Department of Health are long-term government agencies, and they’re as “sticky” as tenants come. Once they move in, they very rarely move out. That’s because government tenant requirements are strict: full accessibility, location within the Principal Activity Area, access to transport, secure parking, and strong energy ratings. This building ticks every box. It’s no coincidence the asset has always housed government tenants, and that history gives you confidence for the future.
The Area This is the part of the story I really like, location and planning policy are firmly on your side. The property is directly opposite the Council Chambers and the new Caboolture Hub, right in the heart of the Caboolture Principal Activity Area. Moreton Bay City Council has locked this down as one of only three Polycentric Business Hubs. In plain terms, no competing town centre approvals will be granted at Caboolture West or Morayfield South. Add 100,000 new residents into the mix, and you’ve got guaranteed demand funnelled straight into this CBD.
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WHAT ARE YOU BUYING? | CONTINUED What Should You Watch Out For I am lucky to have a team of experts that manage over 750 properties across our region. This gives me insight into the common issues that arise in different asset types. The three most common issues to watch out for with office buildings like this are roof leaks, fit out problems and air conditioning. The most recent roof inspection uncovered no issues, there are no leaks and the fit out is new, so we can tick those two off. That leaves the air conditioning. Our management team has proactively managed this asset for years and have paid close attention to the air conditioning systems. We are comfortable saying that the ongoing maintenance program has ensured there is useful life still in the system. That said, we like to look at absolute worst case scenarios when helping people invest. With this in mind, we have had our air conditioning specialists that service these systems provide a full replacement quote. This quote came in at $245k, which could be factored into your cashflow over the next five to seven years or used strategically at lease review dates. As for management, government tenants run on gross leases. That means owners carry responsibility for compliance, fire servicing, AC maintenance, and external areas. For the inexperienced, that’s a risk. The good news? We already manage this asset and have all the schedules and budgets in place, so you’re stepping into a system that works. The Upside This is where it gets exciting, the upside is both secure and significant. Fixed 3.5% annual increases are locked in, with the largest tenant committed through 2030 (options to 2036). Lease expiries are staggered, so you’ll never face a full-vacancy scenario. The larger tenant has already shown interest in expanding if the smaller one doesn’t renew. On rent, the story gets even better. Current net rent is $356/m², while recent comparable Caboolture CBD leases are averaging $450/m² and one proposed development expecting north of $550m2. That’s real headroom. The smaller tenancy’s 2028 review is set for a strong uplift. If the main tenant expands into this space, we can add in 81m² of potential rent from what is currently common area. In terms of replacement cost, for anyone else to replicate this asset would cost them about $10.6 million. That puts today’s income and tomorrow’s growth firmly in your favour. Why Are They Selling This one is simple, it’s not about the building, it’s about the owner. The current owner is a foreign investor, and changing tax rules mean the timing is right for them to exit. That motivation makes the opportunity all the more genuine.
SUMMARY I can speak with real confidence on the points above because our team have been involved in every stage of this property over the last seven years, from selling to the current owner, to securing the tenants, assisting with the fit out refurbishment and managing the property daily. I’m confident the closer you look, the more you’ll like this property.
Chris Massie Director
0412 490 840 chris.massie@raywhite.com
raywhitecommercialncg.com