‘Undervalued’ Qld Police building sold in $73m deal
Queensland Police Service lease office space at 30 Tank St
A prime Brisbane CBD office building housing the Queensland Police Service has changed hands in a $73 million deal.
Investment manager Alceon Group acquired the “undervalued” asset at 40 Tank St, a 10-storey property near the city’s legal precinct comprising tenanted office space and a commercial car park.
The 10-storey tower comprises offices and four levels of carparking
Seller ASX-listed Charter Hall took a $20m pay cut after purchasing the tower from Queensland property tycoon Kevin Seymour for $93m in 2018.
Mr Seymour had banked close to $40m in that earlier deal, having paid $56m for the asset one year prior and renegotiating several of its leases.
The office component of the building is leased to the Queensland Police Service until 2028, while four levels of carparking below is leased to Carepark until 2031.
Alceon Queensland founder and director Todd Pepper said the buy aligned with the company’s strategy of acquiring “undervalued commercial and social infrastructure assets”.
“We are very pleased with this acquisition,” Mr Pepper said.
Artist impression of nearby Roma Street Station
“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 is diminishing very quickly.
“This characteristic is promoting solid rental growth in existing assets and a further tightening of the CBD’s vacancy rate.”
Property Council of Australia data shows the vacancy rate for comparable CBD assets in Brisbane is 9.9 per cent, compared with 11.6 per cent in Sydney and 15 per cent in Melbourne.
Mr Pepper forecast average rental growth of 4.1 per cent per year over the next decade, with strong population growth and high construction costs among forces outpacing supply.
The site is the only public car park in Brisbane’s legal precinct
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Alceon secured new lease terms with the Queensland Police Service for 52.4 per cent of rental income, and with CarePark (43.8 per cent of income) until 2031, increasing weighted average lease expiry (WALE) to more than 5.5 years.
The building’s five levels of office space provide a net lettable area of 5906 sqm, plus 327 public parking bays and 312 sqm of street-level retail.
Property records show one of the food retail outlets, a 129 sqm site with a bar fit-out, was listed to rent at $200,000 a year in 2022.
Artist impression of Queens Street Wharf
Mr Pepper said the 2,1016 sqm property held potential for future redevelopment.
“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 net lettable area by up to 50 per cent,” he said.
The site is located a short walk to Roma St, within 100m of four law courts and next to a pedestrian bridge from Tank St to the Gallery of Modern Art and South Brisbane.
It is close to Roma St Station and Queens Wharf redevelopment, and one of only six major public city car parks.
