Brisbane a hotbed of office leasing activity
Brisbane’s office leasing market is locking in its status as the nation’s most active as a series of deals is struck, with Investa Property Group and Charter Hall in talks with investment house QIC Global Real Estate to anchor their planned tower in the city and potentially take a slice in the development.
The Queensland funds manager has been a long-time tenant of 66 Eagle Street, which has just sold to German group Deka Immobilien for $380 million. Talks are at a preliminary stage, although the tower project is advancing with a demolition contract struck.
Investa confirmed that demolition of the existing buildings was beginning this month and the project was attracting good interest from a number of prospective tenants looking to consider 360 Queen Street as their new commercial home.
The parties declined to comment further on Wednesday, but Charter Hall and partner the Investa Commercial Property Fund have long been committed to developing a new office tower at the site of Clive Palmer’s Mineralogy House in the heart of Brisbane.
Although they missed out to Mirvac on the Suncorp tenancy, their scheme has also drawn the attention of several law firms due to its premium nature.
Development plans for the $650 million Blight Rayner-designed building consisting of 50,000sqm of office space, a retail component and childcare centre were approved in 2018.
Sitting in Brisbane’s Golden Triangle in Queen Street, three existing buildings including Mineralogy House are to be demolished to make way for the new 41-level tower.
QIC, which could take about 12,0000sqm of space, is also looking to expand its office holdings and trim its retail property portfolio in order smooth returns for its investors.
Brisbane’s leasing market was active last year, with mining giant Rio Tinto agreeing to shift from its long-time Queensland headquarters into a new $500 million tower being developed by financier Ashe Morgan and developer DMann Corporation.
The city’s leasing market has picked up this year with office vacancy rates falling. This has spurred a wave of new proposals alongside further precommitment deals as the resources city hits its straps.
Other groups are also close to finding new homes. Virgin Australia’s quest to find a new home is also advancing, with the group believed to be looking at a scheme on the site of a car park, retail and office complex in the heart of Fortitude Valley.
Virgin is believed to be leaning towards an 18-storey tower proposed in the China Town Mall at 31 Duncan Street that was picked up by Tribune Properties for $64m in late 2017.
The airline currently occupies the Charter Hall-owned office building at 56 Edmondstone Road, Bowen Hills, with about six years left on the lease.
CBRE is running the off-market search and sources and Virgin was in the hunt for about 15,000sqm on the city fringe.
It has also looked at 11 Breakfast Creek Road, Newstead, and 1 King Street in Bowen Hills, and sources said a final deal was yet to be signed.
But not all tenants are on the move, with the Queensland government effectively taking its 25,000sqm office requirement out of the market by renewing its long-term lease at Mineral House at 41 George Street, meaning an array of departmental offices will stay put.
The 27-storey, 30,000sqm tower is owned by Singapore’s AEP Investment Management, which picked it up from QIC in 2016 for $159.8 million and then undertook a refurbishment.
This article originally appeared on www.theaustralian.com.au/property.
