Australian-owned asset manager Real Asset Management has secured a modern 23-storey office tower in the heart of downtown Brisbane.

In an off-market deal the wealth and asset manager paid $141.1 million for the fully-leased 14-year-old building at 333 Ann Street.

The building—on the corner of Hutton Lane—is about 150m from Brisbane’s Central Station.

In announcing the acquisition, RAM said the deal meant a passing yield of 7.03 per cent.  The 16,301sq m is leased to tenants who include the Australian government and one of the country’s leading superannuation groups.

The weighted average lease expiry (WALE) is 4.15 years.

RAM said it was attracted by Queensland’s strong economic outlook, including jobs growth and interstate migration which had fuelled historically high population growth.

RAM head of real estate Matthew Strotton said the Ann Street property was well positioned to benefit from the big infrastructure investment, and social and economic benefits driven by the 2032 Olympic Games.

“The asset will become the fifth in the RAM Diversified Property Fund, an unlisted property fund targeting a diversified and defensive property portfolio, which has total commercial real estate assets valued at almost half a billion dollars in four states,” Strotton said.

“This attractive deal is accretive to fund WACR (weighted average capitalisation rate), increases exposure to the high growth Brisbane market, is in a desirable CBD location and provides access to strong contracted rent growth as well as potential value-add opportunities.”

▲ Real Asset Management said it was attracted to the acquisition by Queensland’s strong economic outlook.

“We are at a point in the cycle where taking a position in pre-existing, well-let assets with long-term contracted income is very attractive.

“But more importantly RAM as an active manager, continues to pursue opportunities to further diversify and enhance both income and longer-term growth prospects of the portfolio under management.”

RAM said it expected settlement by the end of 2022, subject to approval by the Foreign Investment Review Board.

Real Asset Management was founded in 2010 and has offices in Sydney, Melbourne, Brisbane, Shanghai and Hong Kong. It manages assets of more than $3.69 billion.