Charter Hall Divests 50pc Stake in Brisbane CBD Office Block

Fund manager Charter Hall has sold its remaining stake in a Brisbane CBD office asset in a $48-million deal. The fund manager’s Long WALE REIT divested the 50 per cent stake in 85 George Street to a private family office. It completes Charter Hall’s two-part divestment of the B-grade asset, after selling the initial stake to Stadia Investment Management in July last year. The Urban Developer understands the undisclosed purchaser acquired the 50 per cent freehold interest in the fully leased commercial office building in an off-market transaction. The deal was stitched together by Tom O’Driscoll and Sam Byrne of Patona Property’s capital markets team. Charter Hall bought the 1989-built 83-85 George Street for $71.5 million in 2018. The fully leased office block accommodates the Brisbane City Police Station with a custom fitout to include an armoury, jail cells and facilities for 300 officers. The Queensland Police Service entered into a 12-year lease in 2019. The building has a forecast net income of about $8 million, which represents a yield of 8.4 per cent. Brisbane continues to attract investor demand and a number of interested parties narrowly missed out on the deal, according to Patona Property’s Tom O’Driscoll. O’Driscoll said investors “remained highly motivated” and were pursuing new opportunities. “We’re seeing increased flexibility in deal structures as capital adapts to access high-quality assets in a competitive environment,” O’Driscoll said. “Our clients are looking to capitalise on the influx of buyer mandates—particularly from interstate and offshore capital—actively targeting Brisbane and fringe commercial assets.” ▲ The Brisbane CBD is expected to lure more investment ahead of the 2032 Olympics and Paralympics. Patona Property’s Sam Byrne described the deal as a bellwether for the Brisbane office market and said the appetite to secure assets “has never been stronger”. “We expect this momentum to carry well into 2025 and beyond,” he said. “Brisbane is increasingly being prioritised in investment mandates that previously focused almost exclusively on Sydney and Melbourne. This shift reflects clear value fundamentals and the potential for capital value uplift in the near term. “We anticipate a significant uptick in asset transactions over the next 12 months as investors respond to this momentum and look to secure a foothold in Brisbane for what is shaping up to be one of Australia’s most active capital markets.” There are reportedly more than 2000 family or private offices operating in Australia, and they are hungry for real estate exposure. Recent research by JLL points to significant capital interest in Brisbane ahead of the 2032 Olympic and Paralympic Games. The report, Unlocking Queensland’s Potential, revealed Brisbane’s commercial property sector offered a rare combination of stability, scale and growth. Brisbane’s CBD office market has recorded the lowest volatility in vacancy rates nationally over the past decade, supported by steady growth in white-collar employment—up 12 per cent and led by healthcare, education and finance. Property Council of Australia office vacancy data also paints a picture of a resilient Brisbane office market with a vacancy rate of 10.7 per cent, below the national average of 14.3 per cent. While new supply has entered the Brisbane office market with the completion of 205 North Quay, demand for space remains strong.

Charter Hall Divests 50pc Stake in Brisbane CBD Office Block

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