This article is from the Australian Property Journal archive
CROMWELL Property Group has acquired the A-grade 545 Queen Street tower for $117.5 million in the latest deal for Brisbane CBD’s heated office market.
Located on a 2,735 sqm parcel at the entrance to the city’s Golden Triangle precinct, the fully leased tower has a total net lettable area of 13,363 sqm occupied by tenants including Sonic Healthcare, the federal government and Calibre Professional Services, with a weighted average lease expiry of 4.2 years.
It was acquired for Cromwell’s Direct Property Fund, which currently offers a 5.8% yield.
Cromwell’s head of retail funds management, Hamish Wehl said 545 Queen Street fits the profile of assets for investors looking for “regular, reliable” income, with 88% of the tower’s rent derived from Government, listed or multinational tenant-customers.
“In the current interest rate environment, it’s challenging for investors to find opportunities that meet their income needs,” he said.
Cromwell is actively seeking additional assets for DPF, which now has exposure to 10 office and retail assets across Queensland, New South Wales, Victoria, South Australia and ACT.
“There continues to be substantial opportunity to grow Cromwell’s retail funds management business and we are progressing opportunities to scale this business further,” Whel said.
The transaction was negotiated by CBRE’s Peter Chapple, Bruce Baker, Flint Davidson and Stuart McCann.
“We have seen a strong increase in buyer demand for high quality, multi-let Brisbane office towers, with long-term investors backing that there will be a flight to quality as tenants seek to upgrade to prime grade CBD and metropolitan office assets,” Baker said.
Chapple said 545 Queen Street attracted a range of occupiers following an extensive refurbishment programme, testament to the asset’s prominent location. The last three years has seen a foyer upgrade and new end-of-trip facilities installed, and the building has obtained a 5.0- Star NABERS Energy rating.
Hot market
Total turnover for the year in the Brisbane investment market was at just $607.6 million, the lowest level since 2008 and 2009 following the GFC, but Brisbane’s CBD has seen a string of towers change hands and put to the market recently.
Brisbane-based Marquette Properties’ acquired 10 Eagle Street for $285 million from Dexus and Canada’s CPP Investment Board, while AsheMorgan paid $210 million for 310 Ann Street a fortnight earlier. They traded on cap rates of 5.5% and 5.4% respectively.
Expressions of interest for Charter Hall’s No.1 Brisbane offering, which comprises three buildings, 217 George Street, 60 Queen Street and 231 George Street, closed last week.
Sensing investment interest in the city, Investa has put the 27-level tower home to health insurer Bupa at 179 Turbot Street to the market with hopes of $200 million, and Abacus Property Group and the Public Trustee of Queensland have just made a 100% interest in the 23-level 444 Queen Street tower available for the first time.
