Owners jump ship and sell SA ‘Centre of Defence’ in a $48.25m deal

Two campus-style office buildings in the heart of Australia’s most prominent naval hub have been purchased for $48.25 million.

Dubbed the Centre of Defence, the 2.5-hectare asset located in the Osborne Naval Shipyard has been acquired by an investment arm of Australian Unity.

The property, at 620-628 Mersey Road, drew significant interest from investors due to the fact it has the Australian Naval infrastructure, a Federal Government entity, tied down to a 10-year lease.

The sale was conducted by Knight Frank’s Guy Bennett and CBRE’s Ian Thomas and Alistair Laycock who sold the property on behalf of Prime Space Projects – the developers of the buildings some 10 years ago.

“In recent years, South Australia’s defence sector has continued to grow exponentially with frigate and submarine contracts awarded and future investment forecast to exceed $90 billion,” Mr Thomas explains.

“This was a key drawcard for purchasers in light of the property’s development potential,” Mr Thomas says.

As well as the two main buildings that provide a net lettable area of 8,006sqm, the offering also includes a 3,000sqm plot of vacant land primed for the development of two additional office buildings that could total 6,000sqm in size.

Mr Bennett says the property’s incredible potential was one of the main reasons it was subject to intense domestic and international investor interest.

“This asset is situated in the most significant naval industry hub in Australia, which will be the home of naval construction and education for decades to come,” Mr Bennett says.

“It’s the office hub of the precinct, which is expected to attract a workforce of around 15,000 people through the Government’s Naval Ship Building Plan,” he adds.