LDR Capital Property Fund has exchanged contracts to sell two Brisbane secondary office assets for $65.5 million, aiming to reduce debt and lower gearing to 30.1%. This follows a recent sale and continues the Fund's portfolio reshaping strategy.
- Contracts exchanged for Limestone and Nexus Centres
- Combined gross sale price of $65.5 million
- Sale at 6.0% discount to December 2025 book values
- Net proceeds of $57.6 million to reduce debt
- Pro forma gearing to fall to 30.1% post-settlement
Brisbane Secondary Offices Sold at Market-Reflective Discount
LDR Capital Property Fund (ASX:LED) has locked in contracts to offload Limestone Centre in Ipswich and Nexus Centre in Upper Mt Gravatt for a combined gross price of $65.5 million. The deals reflect a 6.0% discount to the fund’s book values as of 31 December 2025, aligning with prevailing market conditions for secondary office assets in greater Brisbane.
Both properties, with net leasable areas of approximately 7,000 square metres each and occupancy rates north of 94%, fall into the Grade C category. The buyer is Stadia Capital acting on behalf of a private investor, signalling ongoing appetite for well-located but non-core commercial assets despite the discount.
Debt Reduction and Portfolio Reshaping Drive Sales
Chairman Paul Lederer framed the transactions as part of a broader asset recycling strategy aimed at strengthening the Fund’s balance sheet. The anticipated net proceeds of $57.6 million, after transaction costs and adjustments, will primarily be deployed to repay drawn debt, reducing pro forma gearing to 30.1% from December 2025 levels.
This sale complements the recent disposal of 34 Corporate Drive, Cannon Hill for $24.8 million, which was executed at a 4.6% discount to book value and earmarked for debt reduction as well. Together, these moves mark LED’s exit from three secondary office assets, underscoring a clear pivot towards portfolio optimisation and sustainable cash flow generation.
Settlement Conditions and Timing
Settlement for the two Brisbane assets is expected in late August 2026, contingent on the seller delivering certain contract assignments, novations, or replacements related to the properties. While final completion remains subject to these conditions, the Fund’s messaging emphasises ongoing efforts to identify further asset recycling opportunities to enhance portfolio quality.
With approximately $1.6 billion in assets under management, LDR Capital continues to navigate a challenging commercial office market by focusing on balance sheet resilience and repositioning its holdings towards more sustainable income streams.
Bottom Line?
LDR Capital’s latest asset sales mark a decisive step in trimming leverage and reshaping its portfolio, but the extent of further recycling and impact on future distributions remains to be seen.
Questions in the middle?
- What additional asset recycling opportunities will LED pursue following these sales?
- How will the Fund’s reduced gearing influence its distribution policy in FY27 and beyond?
- What risks remain around settlement conditions and market appetite for secondary office assets?