Brisbane tower falls to Charter Hall for $275m
Property powerhouse Charter Hall has locked in its position as the prime mover in Brisbane’s office market this year picking up a Mary St tower in the central business district from QIC Global Real Estate for $275 million.
The group, which grew its real estate funds empire to over $26 billion in the last quarter, has snapped a series of Brisbane properties this year and flagged further development plays.
The building at 61 Mary Street is destined for the group’s unlisted Direct Office Fund, adding to its $1.5bn national portfolio, in a play flagged by The Australian last month.
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During a busy last quarter, DOF entered into a 50/50 joint venture with Western Sydney University for a new campus development in Parramatta and also took a half stake in a building in Franklin Street in the Adelaide CBD for $135 million.
The latest acquisition will see the Charter Hall-run fund capitalise on the emerging Queensland government precinct near Queen’s Wharf and the Cross River Rail Albert Street Station.
Charter Hall was drawn to the building’s weighted average lease expiry of more than 10 years, with the Queensland government locked in until 2029, leading it to bid more sharply than local and overseas rivals that were chasing the property, one of the largest to sell in Brisbane this year.
The sale price of represented a rate per square metre of $9565 and is in keeping with the trust’s focus on government-occupied assets.
The 17-level complex in the heart of Brisbane’s CBD was sold by CBRE’s Tom Phipps, Bruce Baker and Flint Davidson and Knight Frank’s Justin Bond, Ben McGrath and Neil Brookes.
The agents say the sales campaign generated more than $2 billion worth of bids with almost three quarters from offshore players.
“Brisbane has become an increasingly popular investment destination for both domestic, and particularly foreign capital, as the economic and leasing outlook improves,” Phipps says.
The 28,749sqm tower was one of the main elements of a $562 million government portfolio that QIC bought in 2013. It included seven buildings, some of which have been since sold.
The Mary Street building has undergone a $44m refurbishment and has one of the largest floor plates available in the CBD at 1525-2030sqm. The tower also sits on a substantial 3646sqm site.
Charter Hall has a growing roster of buildings in Brisbane. On behalf of a counter-cyclical mandate from Singapore’s GIC Real Estate, Charter Hall last year bought Santos Place from the Malaysian government-owned Permodalan Nasional Berhad for $370m. It also picked up the 343 Albert Street tower for $108m.
Charter Hall then bought the No. 1 Brisbane the site — which had approved plans for a 81-storey mixed-use apartment tower — and comprises buildings at 217 George St, 60 Queen St and 231 George St for a new mandate that will convert the site into an offie project.
Charter Hall paid $93.96 million for those properties that were sold by the Blackstone-backed 151 Property Group.
The hot Brisbane market has drawn buyers including EG Funds Management, Goldman Sachs and Charter Hall, and Britain’s M&G Real Estate.
This article originally appeared on www.theaustralian.com.au/property.
