Charter Hall buys up Brisbane CBD super site
The listed Charter Hall Group has snapped up three buildings in Brisbane’s central business district in a near $94 million deal, giving it control of a site that was to house one of Brisbane’s tallest apartment towers.
Apartment values have slumped in the city as the market digests a wave of new projects and Charter Hall could now turn one of those projects into a landmark office tower as it seeks to capitalise on rising commercial rents.
The site Charter Hall bought is known as No 1 Brisbane – three adjoining buildings on separate titles comprising 217 George St, 60 Queen St and 231 George St – that span a lettable area of more than 10,000sqm.
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Charter Hall chief executive David Harrison says opportunities to buy such prime office and retail buildings are rare.
He says the buildings have created “a fantastic amalgamated future redevelopment opportunity which can be held over the medium term in a CBD undergoing significant infrastructure improvements … These acquisitions give us and our future capital partners optionality, given an existing 81-storey approved tower scheme, to consider redevelopment long-term whilst we actively manage and lease up vacancies”.
Charter Hall, alongside the unlisted Investa Commercial Property Fund, also remains committed to developing a $650 million new office tower at the site of Clive Palmer’s Mineralogy House in Brisbane, despite missing out to Mirvac on the lucrative Suncorp tenancy. The group is bullish about its latest purchase and said it could be used as a seed asset for a new investment strategy.
“Our vision would see a new development like the successful 333 George St project in the Sydney CBD opposite Martin Place completed,” Harrison says.
The original approval was gained in December by the Blackstone-backed 151 Property Group, which had proposed an 81-storey tower.
Rising to the city’s height limit of 274m, the Blight Rayner-designed building was to include 534 units in 77 levels above a four-storey retail podium and 12 levels of carparking.
The building sale campaign, handled by JLL’s Seb Turnbull, Luke Billiau and Rob Sewell and Colliers International’s Tom Barr, Jason Lynch and Brendan Hogan, drew interest from residential developers before Charter Hall prevailed. The deal was flagged by The Australian last month.
Charter Hall said the price represented a core capitalisation rate of 7.45% and a fully let passing yield, including income support, of 7.9%.
This article originally appeared on www.theaustralian.com.au/property.
