THE Ipswich City Council has given the first green light for its entity, Ipswich City Properties, to proceed with a $5.9 million acquisition of the Ipswich City Plaza.
On Tuesday afternoon councillors agreed to recommend the acquisition of the mixed-use building at 2 Bell Street.
The plaza consists of a lower-level retail complex with office accommodation on the seven upper floors.
It was offered for sale after the appointment of KordaMentha as receivers and managers of the plaza earlier this year.
In a non-binding agreement and subject to a due diligence process, Ipswich City Properties agreed to purchase the site for $5.9 million.
Stamp duty and legal costs are expected to increase the purchase price to about $6.25 million.
A report provided to councillors on the City Management, Finance and Community Engagement Committee noted the gross annual income of the plaza site was $705,343.
With about $575,000 in leasing and financing costs, the property would provide a surplus of $130,000 each year.
Ipswich mayor Andrew Antoniolli said the purchase of City Plaza significantly below market value “represented a once-only opportunity for the city”.
“Its strategic location will only increase in value as the adjacent redevelopment progresses,” he said.
The property is subject to a leasehold tenure and the agreement with head lessor, Queensland Rail, is due to expire in November 2077.
The purchase of the plaza by Ipswich City Properties will be funded through a $75 million loan agreement with the council, which also facilitated the entity’s $50 million purchase of Ipswich City Square in 2009.
Originally Published: www.qt.com.au