This article is from the Australian Property Journal archive
CROMWELL is hoping the green credentials of its Energex House, part of its Gasworks development in Newstead, will attract a buyer for at least $360 million.
In a busy 2021 for major Brisbane office asset transactions, Cromwell bought 100 Creek Street for $184.7 million in October, following its $117.5 million acquisition of 545 Queen Street.
Energex House was Queensland’s first 6.0-star Green Star office building and the recipient of the maximum 5 Star GRESB Rating in 2021. It was developed in 2010 by Cromwell and is now being sold out of the fixed-term Cromwell Riverside Trust after unitholders indicated a preference for a return of capital.
The state government-owned Energy Queensland, one of the country’s largest electricity infrastructure distributors, occupies 92% of the 30,563 sqm building on a lease running to August 2030. It includes the largest office floorplates in Brisbane, at 4,600 sqm, with full-height atrium spaces bridged by interconnected staircases.
It is being offered through CBRE’s Bruce Baker, Peter Chapple and Tom Phipps together with JLL’s Paul Noonan and Seb Turnbull via an expressions of interest campaign.
Baker said the building’s ESG attributes and strong tenancy covenant were expected to be key drivers of domestic and offshore buyer interest.
“There has been a clear uptick in investor appetite for quality Australian office assets with robust ESG credentials,” he said.
“In the case of Energex House, the building offers exceptional sustainability ratings and an anchor tenant that delivers essential community and social infrastructure and has made a significant investment into delivering high-quality ESG outcomes to its customers and stakeholders. This includes a commitment to source 50% of energy from renewables by 2030.”
CBRE’s 2021 Global Investor Intentions Survey shows that 60% of respondents have adopted ESG criteria as part of their investment strategies, with the Americas, EMEA and Asia-Pacific all recording a stronger focus on ESG issues than in previous years.
RICS research shows more than half of property industry participants believe that green and sustainable buildings achieve a rent and a price premium. More than one-third believe that the rent and price premium stands at up to 10%; around 15% judge it to be higher still.
Landlords across the Asia Pacific are beginning to consider environmental, social and corporate governance factors in greater numbers when it comes to their real estate assets, according to PwC and the Urban Land Institute, as the prospect of a “green penalty” from tenants looms on the horizon. Hundreds of property companies in the built environment sector have signed on to the Race to Zero campaign.
Turnbull said Energex House’s coveted near city location would be another buyer drawcard, with the building prominently positioned on a massive 9,682 sqm, inner Brisbane site.
Newstead experienced inner Brisbane’s highest population growth over the five years to 2020 at 9.1% per annum and more than 33,000 additional residents are forecast by 2026.
A half stake in the 205 North Quay office development in Brisbane’s North Quarter is also currently on the market, expectations of about $350 million.
