This article is from the Australian Property Journal archive
FINANCIER and multi-strategy alternative investment manager, Alceon Qld, has snapped up a commercial car park and office building in the Brisbane CBD for $73 million.
The social-infrastructure asset at 40 Tank Street in Brisbane’s legal precinct includes new lease terms with the Queensland Police Service until 2028 and CarePark until 2031, increasing the WALE to more than 5.5-years.
The building spans five levels of office space with a net lettable area of 5906sqm, 312sqm of street level retail and four levels of parking offering 327 bays.
“The site has the most flexible Brisbane town planning uses with unrestricted building height (subject to aviation limitations), with the option of expanding the existing NLA by up to 50 per cent. There is also the potential for the unique 2,106m2 site to be development ready site two years before the 2032 Brisbane Olympic Games,” said Todd Pepper, founder and executive director at Alceon Qld.
The asset also boasts strong ESG credentials including a 6-star NABERS energy rating.
“We are very pleased with this acquisition. The supply outlook for the Brisbane CBD office market is relatively restrained with just three projects committed to 2028, and the availability of good quality, well located contiguous space, diminishing very quickly,” added Pepper.
“This characteristic is promoting solid rental growth in existing assets and a further tightening of the CBD’s vacancy rate.”
Alceon’s research indicates the Brisbane CBD is the only market nationally where the secondary market is tighter than prime, meaning rental growth in the secondary market will underpin growth in the market as a whole and is likely to pressure tenants to upgrade.
Since January 2017, the Brisbane CBD has also proportionately seen the least amount of CBD office space added compared with Sydney and Melbourne, while also recording the most significant positive net absorption.
“The expectation is that stronger rental growth will also be driven by elevated construction costs that will continue to push up economic rents for new projects, with forecast average net effective rental growth of 4.1 per cent a year over the next 10 years,” added Pepper.
According to the Property Council of Australia, the vacancy rate for B-Grade assets is 9.9% in Brisbane compared with 11.6 per cent in the Sydney CBD and 15% in the Melbourne CBD.
“Its location is ideal for Queensland Police, being within 100 metres of four law courts, having a direct pedestrian bridge from Tank Street to the Gallery of Modern Art and South Brisbane, as well as being only a five-minute walk to Roma Street,” said Pepper.
“The carpark is a key social infrastructure asset, being one of only six major (250-bay +) public car parks in the Brisbane CBD and the only one in the legal precinct. Extremely restrictive town planning will make future public car parking of this scale difficult to build therefore limiting future CBD car parking supply.”
