Brisbane CBD office/carpark bought for 21 per cent less than its last sale five years ago
The property at 40 Tank St in the Brisbane CBD which sold for $73m.
Investment manager Alceon Qld has secured a Brisbane CBD office/car park building for 21 per cent less than what it sold for five years ago.
They paid $73m for the 10-storey building at 40 Tank St, which is occupied by the Queensland Police Service until 2028 and CarePark until 2031.
Alceon Qld founder and executive director Todd Pepper said the purchase was part of its strategy to acquire undervalued and counter cyclical commercial and social infrastructure assets, adding value through active management.
“The supply outlook for the Brisbane CBD office market is relatively restrained with just three projects committed to 2028, and the availability of good quality, well located contiguous space, diminishing very quickly,” he said.
“This characteristic is promoting solid rental growth in existing assets and a further tightening of the CBD’s vacancy rate.
“The expectation is that stronger rental growth will also be driven by elevated construction costs that will continue to push up economic rents for new projects, with forecast average net effective rental growth of 4.1 per cent a year over the next 10 years.”
The property at 40 Tank St in the Brisbane CBD.
According to CoreLogic the property last changed hands when in 2018 when Charter Hall Long WALE REIT and the unlisted Charter Hall Direct PFA Fund paid $93,038,127 in a deal that was struck for a reported initial yield of 5.84 per cent.
Property tycoon Kevin Seymour and Ariadne Australia had sold the building to Charter Hall after paying $56.1m for it in 2017.
The building boasts strong ESG credentials with a 6-star NABERS energy rating, comprising five levels of office space with a net lettable area of 5906sq m and four levels of parking offering 327 bays, and 312sq m of street level retail.
Mr Pepper said other features of this asset that attracted Alceon were its specialised location,
carparking, social infrastructure function and redevelopment opportunity.
“The site has the most flexible Brisbane town planning uses with unrestricted building height
(subject to aviation limitations), with the option of expanding the existing NLA by up to 50 per cent,” he said.
“There is also the potential for the unique 2106sq m site to be development ready site two years before the 2032 Brisbane Olympic Games.”
Mr Pepper said the location was ideal for the Queensland Police, being within 100m from four law courts, having a direct pedestrian bridge from Tank Street to the Gallery of Modern Art and South Brisbane, as well as being only a five-minute walk to Roma St.
“The carpark is a key social infrastructure asset, being one of only six major (250-bay +) public car parks in the Brisbane CBD and the only one in the legal precinct,” he said.
“Extremely restrictive town planning will make future public carparking of this scale difficult to build therefore limiting future CBD carparking supply.”
