Deals Flow Across Brisbane’s CBD Office Market


Momentum in Brisbane’s CBD office market has continued to gather pace with a substantial increase in transaction activity this year.

According to a report by Knight Frank, more than $1 billion in transactions is expected to close through the first six months of 2021 after a sharp upturn in investor confidence and buoyed by the city’s return-to-office.

Around $740 million of property is either under contract or on the market so far this year.

It follows a lacklustre 2020, in which $600 million in transactions were recorded for the year, the lowest total transaction level since the post-GFC hangover of 2008 and 2009.

The latest property to go to the market is the 27-level office building managed by Investa at 179 Turbot Street, currently anchored by insurer BUPA with a lengthy lease in place until September 2025.

Developed in 2009, the property offers 24,900sq m of net lettable area and 185 car bays with 1267sq m floor plates. It also has a 5-Star NABERS Energy Rating.

The property is being marketed by Justin Bond, Ben Schubert and Neil Brookes of Knight Frank with price expectations around $200 million.

“Investors are increasingly attracted to [Brisbane] due to its value and stability, and this property is one of the most significant core-plus opportunities along the eastern seaboard, with the ability to immediately commence a proactive leasing strategy,” Bond said.

179 Turbot Street Brisbane CBD
▲ Knight Frank is handling the sale of 179 Turbot Street in the CBD for Investa.

A similarly positioned asset, at 310 Ann Street, recently settled for $210 million after a lengthy campaign, purchased by Commercial property fund manager AsheMorgan.

The sale price reflected an initial yield of about 5.5 per cent and indicated an early appetite for investor interest in tenanted commercial assets in the city’s CBD.

Earlier this month, Dexus and Canada’s CPP Investment Board sold Brisbane’s 10 Eagle Street, an A-grade office tower, for $285 million to Brisbane-based and focused investment manager Marquette Properties.

Also expected to transact soon is 545 Queen Street, being sold by Axis Capital alongside the Saragossi family, which bought it in 2017 for $70 million.

The 13,400sq m building is under contract for $117 million to Cromwell Property Group in a deal that requires Foreign Investment Review Board approval.

If realised, that transaction would reflect a core market yield of 6.1 per cent and a passing yield of 6.75 per cent for the refurbished asset.

A joint venture between Charter Hall and Abacas Property Group has also contracted to buy 241 Adelaide Street, a 10,100sq m B-grade office block, for $63.5 million.

The building sales are likely to go through at levels that show that capital values are holding despite the tough leasing market.

“There remain relatively few CBD assets formally offered to market, although that will change through the course of Q2,” Bond said.

“With recent campaigns resulting in successful sales, at firm yields, vendor confidence is improving.

“There is no doubt that purchaser appetite for Brisbane remains high, although non-core office is secondary to core office and industrial assets at this time.”

As of April, the Brisbane CBD office market totals 2.2 million square metres of stock, with a 13.6 per cent vacancy rate.

Brisbane is now on track to welcome upwards of 100,000sq m of new stock currently under construction during the next two years as well as 500,000sq m of projects currently with development approval.

Prime face rents have fallen by 4.5 per cent in the year to April and are 6.5 per cent below the levels of January 2020, following the impacts of the pandemic.


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