Adelaide property investors outbid offshore parties in Light Sq sale 70 Light Square, Adelaide. ADELAIDE-based property investors Gerald and Michael Valk have outbidden offshore investors to secure a Light Square office tower for $14.5 million. The businessmen behind the Luna & Valk building supplies company snapped up the fully leased URS building at 70 Light Square at a yield of 8.8 per cent. Jones Lang LaSalle (JLL) senior negotiator Lukas Weeks said the 3300sqm building attracted more than 50 inquiries. "While we saw interest from overseas groups, syndicators and national groups, the depth of interest from local private investors is testament to the amount of money either held on deposit or available as equity in portfolios," he said.. To present an unconditional offer with 30 days settlement at over $4500 per sqm to the vendor demonstrates the competitive nature of the campaign and the strong demand for these types of assets. Mr Weeks said JLL had secured close to $30 million worth of property for private investors in the past six weeks, including a Goodlife health club property at Port Rd, Hindmarsh and a medical centre at Amsterdam Crescent, Salisbury Downs. "The properties featured long-term secure leases and strong lessee covenants in sought-after locations," he said. The low-interest rate environment is offering a really attractive spread between yield and cost of funds. According to Colliers International's latest CBD office report, A-grade yields in the CBD office market are expected to tighten over the next 12 months from around 8.25 per cent to 8.15 per cent. A-grade capital values are expected to rise from around $4725 per sqm to $5020 per sqm. Colliers International national director Alistair Mackie said a diverse range of buyers were in the market for high quality assets. That includes institutional property groups like Cbus Property which in July paid $140 million for the development of 50 Flinders St. The 20,000sqm office project is 75 per cent precommitted to People's Choice Credit Union and Santos with early demolition works underway. "Small private investors are back, chasing higher yielding investments," Mr Mackie said. Large domestic and offshore institutions are also in the market looking to secure a high quality asset with long WALEs and secure tenants in place. Prime yields have remained stable through the first half of the year and are likely to remain unchanged until early 2014, after which we expect some mild yield compression as business confidence improves, vacancy rates fall and the weight of money chasing prime stock grows, Knight Frank's latest office report points to pension funds in South-East Asia as a source of investment, given their renewed interest in the Australian property market. "There is a strong argument to suggest that there may be further yield compression over the next 12 month period, which is driven by weight of money rather than any improvements in the office market fundamentals," the report says.