Fringe Office Offers Safe Haven from Covid Headwinds

A prime office asset is set to hit the block in South Brisbane’s Cultural Precinct—the city’s most tightly-held office market.

Located on a high-profile corner site at the intersection of Merivale and Peel Streets in the growing commercial area of South Brisbane, South Central Commercial is a state-of-the art, ten-storey mixed-use tower offering 2,856sq m of premium office space, developed by Brisbane-based boutique developer Forrester Properties.

The asset is being marketed and sold by Knight Frank agents Blake Goddard and Matt Barker.

The asset boasts five levels of well-appointed office accommodation featuring flexible floor plates with excellent natural light and view corridors supported by secure car parking.

Not only is the A-Grade tower situated on a prime corner block in Brisbane's inner-south—revealed in Knight Frank's 2019 Fringe Office Report as having the city's lowest vacancy rate at 10 per cent—but South Central also happens to be a stone's throw from Queensland's cultural epicentre, home to some of the state's best restaurants, bars, lifestyle precincts and venues.

Knight Frank associate director Blake Goddard says the tenant amenity of the asset is second to none, with locations such as GOMA, Fish Lane and South Bank Parklands all within walking distance.

And as one of the first secure, sizeable commercial investments to be offered on the east coast since the outbreak of Covid-19, Goddard says South Central presents the rarest of opportunities: a stable investment offering favourable returns during a time of unprecedented economic uncertainty.

"South Central is underpinned by investment credentials that will navigate an investor through the current and future economic headwinds by providing above market returns."

South Central comes 94.4 per cent occupied with a 2.73 year WALE, and is home to a diverse mix of tenants including government, not-for-profit and private enterprise, with a staggered expiry profile and favourable fixed review mechanisms.

"The expiry profile provides the stability to navigate the short- to medium-term uncertainty, while allowing an investor to capitalise on the future rental uplift in the market," Goddard said.

With Australia's southern states on the brink of further Covid-19 lockdowns, Queensland maintains an enviably low infection rate, with Brisbane viewed as a genuine "safe haven": a positive for local business and economic sentiment to be sure—but in a broader context too.

“With cash rates globally at an all-time low and fixed income and bond yields falling, Australia is considered a genuine safe haven," Matt Barker said.

And with security of income and rent relief being one of the biggest sources of uncertainty currently within the industry, Barker says the asset's 94.4 per cent occupancy level—with 43 per cent of space occupied by government and not-for-profit organisations—provides an unparalleled investment opportunity in a market which has been starved of quality opportunities.

"This will be the first major test of the Brisbane investment market post Covid-19 and will set a transactional benchmark moving forward."

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