This article is from the Australian Property Journal archive
AS confidence in Brisbane’s office market picks up, Charter Hall and Abacus Property Group’s CHAB Office Trust has acquired 241 Adelaide Street for a $63.5 million.
The consortium will acquire the leasehold asset for $31.5 million from ASX-listed Australian Unity Office Fund and has simultaneously entered into a conditional contract with the Brisbane Club to acquire the freehold interest for $32 million, subject to a leaseback of up to five years plus options.
The property comprises approximately 10,107 sqm of net lettable area plus car parking for 85 cars, located on the corner of Adelaide Street and the Anzac Square public park.
Abacus managing director Steven Sewell and Charter Hall group CEO David Harrison said the acquisition of this quality building in a prime location in Brisbane CBD is a great opportunity for the consortium to implement active asset management plans and capabilities to drive the returns from the asset.
AOF’s leasehold has approximately 42 years remaining to the Brisbane Club. Fund manager James Freeman said the asset was identified as non-core.
“The purchaser has also entered into arrangements with the Brisbane Club to acquire the freehold. AOF’s sale is conditional upon completion of the acquisition of the freehold.
“AOF confirms the previously provided FY21 FFO guidance of 18.3 – 18.7 cpu and reaffirms FY21 distribution guidance of 15.0 cpu, subject to no material change in market conditions, no material change to the portfolio and no unforeseen events.” Freeman said.
The acquisition comes as smaller tenants drive leasing activity in the CBD.
Since the start of the year, Dexus has signed 27 leasing deals totalling 9,311 sqm across its Brisbane offices portfolio.
Office occupancy in Brisbane at the end of February was 64%, which was significantly higher than Melbourne’s 24% and Sydney’s 48%.
Despite Property Council of Australia data showing Brisbane CBD office vacancies had lifted from 12.9% to 13.6% during the second half of 2020, confidence is defying the statistics.
Cromwell last month started refurbishment of 400 George St which it acquired in August 2019 for $524.75 million, whilst global investment manager DWS and Consolidated Properties Group started construction of the $260 million 895 Ann St office development in the Fortitude Valley.
In the same month, Canada’s QuadReal and Charter Hall acquired 309 North Quay and have proposed a major 109,000 sqm development.
