Singapore sovereign fund to exit Brisbane

A Charter Hall managed trust is selling Santos Place, Brisbane

Singaporean government sovereign wealth fund GIC will put Brisbane’s landmark Santos Place on the block in the biggest test of the Queensland capital’s recovering market this year.

The fund picked up the tower in 2017 after awarding a mandate to the listed Charter Hall to invest in counter-cyclical office plays. It bought the building from Malaysian government-backed investment group Permodalan Nasional ­Berhad for $370m and it could sell from around this level.

The sale of the tower at 32 Turbot Street is being handled by real estate agencies CBRE and JLL, with Charter Hall pointing to the improvements it had made to the 34,000sq m block.

The offer of the building in the Brisbane CBD’s prime-grade sector comes after a series of smaller deals. Sellers have included a Dexus fund that offloaded 145 Ann St to investment giant Aware Super for $215.5m and then a trust run by Singapore-based AEP Investment Management selling 41 George Street.

Since picking up Santos Place, Charter Hall has increased the building occupancy and renewed major leases following an extensive refurbishment of the building, including sustainability initiatives and the achievement of Net Zero Scope 1 and 2 emissions in 2024.

Charter Hall office chief executive Carmel Hourigan said after securing extended leases with Santos and Vincents, Charter Hall had “decided to realise its investment and take advantage of the strong bifurcation of demand toward high-quality assets, in one of the lowest CBD vacancy markets nationally”.

The company believes Brisbane offers strong growth prospects and expects few major sites to add to supply in coming years.

“Brisbane’s office market is one of Australia’s most buoyant, and premium office assets are very tightly held. There’s been a lack of new supply for some time and combined with solid economic and population growth and strong investment, the growing appetite for modern, quality office accommodation shows no signs of slowing down,” Ms Hourigan said.

“Santos Place is a strategically positioned investment with nothing to spend and a strong lease profile – it’s poised to capture the anticipated market rental growth,” she added.

The sale of the property will provide an indicator of investor demand for CBD office assets with top sustainability credentials.

The building is certified by the Green Building Council of Australia’s Green Star Performance at the highest 6 star level – as well as a 5.5 star NABERS energy rating and a 6 star NABERS indoor environment rating.

The 36-storey premium office tower has parking for 196 cars and direct pedestrian and bicycle ­access to Kurilpa Bridge.

Sitting in the prominent justice precinct, one of the most active areas of the CBD, it has views across the Brisbane River and is near transport connections, including Roma Street Station and King George Square.