Seabank

Rebuilding confidence in the eyes of tenants and the market to achieve an outstanding sales result. 

Background

Seabank is a prominent commercial building located in the centre of Southport, Gold Coast which was built in circa 1987. The expansive combined site area of 5,995 sq.m includes both the Seabank commercial office building as well as Seabank Lane, a 1,222 sq.m vacant parcel of land utilised as a 42-bay car park. The building overlooks the Southport Broadwater and comprises approximately 8,547 sq.m of net lettable area across 11 levels, including 1,033 sq.m of ground floor retail. The basement car park provided 202 bays, with a further 15 visitor parking spaces at grade. 

At the time of our appointment in October 2013, Seabank's occupancy was approximately 60% and while some cosmetic upgrades had been completed in earlier years, it was clear the building's services hadn't been updated since 1987. In addition, there had been a poor track record of building maintenance necessitating a major capital works program. Local market conditions were also deteriorating and office demand and net absorption levels were at extreme lows. 

How we helped

• We stabilised the asset management process recognising the need for better and more coordinated management. As part of this we carried out an extensive review of outgoings and service contracts to ensure the best value and service was obtained. 
• We opened communication directly with tenants to achieve a higher degree of tenant satisfaction. 
• We implemented a capital works program that included:
  • replacing the main switchboard, the building management control systems and three lifts
  • installing additional end of trip facilities and upgrading facilities in the coffee shop to provide a better experience for tenants and their employees
  • upgrading and modernising common amenities and common areas. 
• We reinvigorated the leasing program to secure quality tenants working with leasing agents to structure incentives that would appeal to A Grade and government tenants. 
• We undertook some test fit plans and completed a targeted tenancy upgrade to provide display suites for prospective tenants (i.e. due to the outdated nature of vacant floors, we saw the need to not only create, but implement the vision for prospective tenants). 
• We rebuilt the market's confidence in the asset by showing the landlord's commitment to upgrading the building, stabilising occupancy and improving income. Once that goal was achieved, the asset was placed on the market at the optimal time having regard to market conditions, following a thorough process of selecting the most appropriate sales agent to sell the asset.
• Before the asset was placed on the market an extensive Vendor's due diligence process was undertaken to ensure the sales program would run smoothly and any potential issues were understood and disclosed. 
• A sales program followed, allowing buyers to access an extensive data room and to engage in rounds on offers. 
• Following the close of offers, contract terms were negotiated effectively, managing the risks of the Vendor and achieving a short-term settlement. 

Result

Through our work, we were able to increase building occupancy by approximately 35%, delivering to the market a building that was circa 90% occupied. By repositioning Seabank in the eyes of tenants and the market, the owners were able to achieve a sale price of $34 million, being 55% over the original valuation - representing a yield of 6.99%.