A former bread factory built during World War I in Brisbane’s Fortitude Valley has changed hands for $15.8 million.
RG Property bought the refurbished brick office building at 37 Kennigo Street from Madad Property in a deal negotiated with CBRE's Jack Morrison and Peter Chapple, in conjunction with Cushman & Wakefield's Peter Court and Mike Walsh.
The purchase gives the group an award-winning complex of three character buildings with “adaptive redevelopment and repositioning potential” according to CBRE.
It sits on an 5094sq m inner-city land holding with dual street frontages.
“We’re excited by the medium and long-term potential of this asset as the Fortitude Valley region continues to go from strength to strength,” RG Property chief executive Rhett Williams said.
“Securing this large landholding puts us and our investors in a strong position to capitalise on the continued growth in the Fortitude Valley market, which is emerging as a natural extension of the Brisbane CBD.”
RG Property sold Brisbane’s 410 Queen Street office building last year for $53.5m after acquiring it in 2011 for $28.8m.
The complex, which was built in 1916 and began life as Keating’s Bread Factory, is partially heritage listed and was redeveloped and refurbished in 2008, 2017 and again last year.
The three buildings provide 2955sq m of modern office space and 46 car bays.
The property’s major tenant is Hassell Architects along with a number of smaller occupiers, including software companies, marketing firms and financial services companies, with a staggered lease expiry profile during the next three years.
CBRE’s Morrison said assets such as 37 Kennigo Street were in “high demand as buyers seek to add a mix of asset types to their portfolios”.
“This underpinned interest in the sale campaign, given the current tenant and buyer interest in well-appointed heritage assets,” Morrison said.
Cushman & Wakefield’s Peter Court said the sale came after a rise in buyer enquiry from a range of syndicates and investment clubs.
“We saw an increase in demand towards the end of 2020, a theme that has increased in early 2021 and looks set to continue as buyers view the current market conditions with more certainty,” Court said.