This article is from the Australian Property Journal archive
PENT up demand for quality suburban office space in Queensland’s post-coronavirus property market is driving renewed leasing and development activity, and Alceon Queensland has finalised the $41.3 million sale of a fully occupied building at its new office park.
Three top-floor commitments totalling almost 1,500 sqm within the four level, A-grade building at Acuity Business Park at Robina on the Gold Coast have just been secured. The sale represented a yield of 6.5%.
Alceon Queensland acquired the 209 Robina Town Center Dr site of 9,921 sqm early last year from Gold Coast City Council, which had earmarked it for a new regional council office but later scrapped the plan.
Acuity’s Building 1 the first of three standalone office buildings built at the park. Anchor tenant Metricon has commenced the fit-out of its 4,500 sqm and is due to move in by the end of November.
Newly signed tenants include medical recruitment agency Medrecruit, which has taken a seven year lease over 1,042 sqm, and development company Intrapac Property, which has taken a six year lease for 177 sqm.
The remaining 244 sqm of the top floor is in heads of agreement for a five year deal with a yet-to-be disclosed tenant. The building reached practical completion at the end of July and was delivered on time and on budget by Alceon’s construction partner Graystone.
Rental rates for office space in the estate start from a net rate of $400 per sqm.
The office project is transforming the site into a work hub comprising 15,000 sqm of A-grade commercial space with large floorplates, ground floor plaza, basement parking, gyms and parks.
Alceon Queensland executive director Todd Pepper said the leasing deals reflected strong demand for good quality office accommodation in suburban growth areas, as well as also market confidence despite the uncertain impact to the economy post-COVID.
The company has signed up nearly 15,000 sqm of new office space since COVID, with all of those deals in suburban locations, according to project director Paul Huston.
“We believe that good quality office buildings in the right locations are always going to appeal to tenants.”
Strong metropolitan office leasing has encouraged Alceon Queensland to recommence construction at Northshore Hamilton, where it is forging ahead with plans for three other office buildings in the burgeoning Brisbane inner-north riverside precinct.
Construction of the three level A-grade office building at 385 MacArthur Ave was paused with the advent of COVID-19 earlier this year and subsequent lockdown.
Pepper said although the company was always confident in its suburban business park development strategy going forward, given the unprecedented scenario that was unfolding it had erred on the side of caution by putting construction on hold.
“At the time, we were just uncertain as to how much occupiers were going to be impacted by COVID and whether there was going to be continuing demand,” he said.
Property Council of Australia data showed Brisbane city fringe vacancies lifted to 14.2% from 13.6% over the six months to July, but this was largely due to new supply. Over 125,000 sqm of space will be added to the CBD market over 2021 and 2022, which will add some more choice for tenants.
Pushing the restart button a Northshore Hamilton was an easier decision for Alceon Queensland after a project report was undertaken by property research consultancy Macroplan, which ultimately recommended a “sooner rather than later approach” be adopted for construction.
It cited the project’s “advantageous geographical location” and deemed that demand for office accommodation for small and medium enterprises – the most likely occupants the building “will not be greatly diminished” as a result of the pandemic.
Designed by Brisbane architecture firm Blight Rayner, the Northshore Hamilton precinct will comprise more than 3,500 sqm of A-grade office space. It will be the fifth office building developed by Alceon and construction partner Graystone in the emerging hub since 2013. Of the four other existing buildings, comprising 15,000 sqm, three also were speculatively built.
All are fully occupied and since completion have been on-sold, while the fourth office building was a design and construct for Puma Energy.
Huston, said the suburban office market was as active as ever and the impact of COVID-19 was driving renewed focus on commercial space in non-CBD locations.
