Super Fund Swoop Buoys Brisbane Office Market

Institutional capital is finally back and spending big in Brisbane’s office market.

Or so it is being hailed in the wake of Aware Super dropping $215.5 million on 145 Ann Street, a 27-storey tower in the Queensland capital.

It is the first acquisition in the Sunshine State by Aware Real Estate—the super fund’s property platform—since it was launched in 2022.

More significantly, however, the purchase of the A-grade CBD asset from Dexus is the first major office play in the city by a super fund in five years.

It was brokered by JLL’s Paul Noonan and Seb Turnbull.

Noonan said the off-market deal underscored a strengthening investor focus on the Brisbane market.

“This acquisition by Aware Real Estate...marks the return of institutional capital to Brisbane in this current cycle,” he said.

“We continue to see increased focus on the Brisbane market as investors seek the growth prospects our market is predicted to deliver.”

The Ann Street tower with a gross floor area of 27,551sq m sits in the CBD’s uptown precinct near the historic King George Square.

Its office accommodation features high-grade sustainability credentials and a suite of high-end tenant amenities, including end-of-trip, wellness centre and on-site concierge.

The acquisition is a significant addition to Aware Real Estate’s burgeoning $3 billion property portfolio and aligns with its strategy to target office opportunities along the eastern seaboard.

“This asset has cleverly designed floorplates that capture expansive views, is close to public transport and offers tenants high quality amenities,” ARE head of investment and capital transactions Pete Carstairs said.

“Expanding into the Brisbane office market will also provide ARE geographical exposure to a new, core eastern seaboard market that is currently showing growth due to market tailwinds.”

▲ The 27-storey office asset in the Brisbane CBD was sold for $215 million.

Carstairs said the Brisbane office market performance was strong relative to other Australian and global office markets due to limited supply, a strong tenant demand and declining vacancy rates which in turn drive effective rental growth.

“Our analysis has identified favourable drivers such as below average A-grade market vacancy rates which lead to a forecast of significant rental growth over the next five years together with a strong state economic outlook,” he said.

A key drawcard of the asset was its high level of sustainability credentials, including 6-Star Green Star Performance rating for Building Operations and high operating performance certifications for NABERS Energy (5.5 Star), Water (4.5 Star) and Indoor Environment (4.5 Star) and Climate Active Carbon Neutral Certification.

“Environmental credentials are critical for major tenants looking for office spaces that meet their environmental criteria,” he said, adding that ARE would look to further improve the asset’s performance.

Navigator Property Group, led by Tom Phipps, provided strategic advice to ARE on the acquisition.

“While capital markets are challenging, the Brisbane leasing market is on the rise with relatively low vacancy compared to other capital cities and a limited supply pipeline,” Phipps said.

“In addition to leasing tailwinds allowing us to drive rental growth, we anticipate strong capital appreciation as the CBD market recovers in the lead into the Brisbane Olympics.”