This article is from the Australian Property Journal archive
THE $1.3 trillion Prudential Financial-backed PGIM Real Estate returned to Brisbane, snapping up 444 Queens Street, which has sold for the first time in over half a century, for $54.4 million.
PGIM has gazumped frontrunner Dmann Corporation to acquire the office tower from joint vendors Abacus Property Group and The Public Trustee of Queensland, which offered a 100% interest in the building for the first time in 56 years.
The transaction comes hot on the heels of PGIM partnering with Fortius Funds Management to acquire 307 Queen Street for $214 million two months ago. PGIM also has a stake in 130 Queen Street, alongside Marquette Properties.
“We are confident in Brisbane’s longer-term fundamentals, driven by strong interstate migration, continued infrastructure spend and increasing offshore investor interest, particularly with the city recently announced to host the 2032 Olympics.” PGIM head of Australia and managing director Steve Bulloch said.
“The ability to acquire a Queen Street building at this rate ($3,895/sqm) provides an opportunity for us to execute our strategy of repositioning well-located but tired assets to meet the needs of future tenants,” he added.
PGIM will reposition the building to A Grade standard through a comprehensive refurbishment.
“This acquisition comes as a strategic response to an accelerated structural shift to higher amenity, well-located CBD office assets that demonstrate strong sustainability characteristics.
“Office tenants are becoming more discerning, and this asset will enable PGIM Real Estate to showcase its commitment to ESG, sustainability and innovation. There is also potential to work with our innovation partners at Taronga Ventures throughout the design, construction and operations process.” Bulloch said.
The sale and campaign was managed by Justin Bond and Blake Goddard of Knight Frank and Tom Phipps, Peter Chapple and Bruce Baker of CBRE.
The 22-level, 13,967 sqm office building is located within Brisbane’s Golden Triangle, set on a 1,708 sqm site, with 31 metres of frontage to Queen Street and 72 parking spaces.
At the same time, PGIM yesterday partnered with digital infrastructure company Equinix to establish a US$575 million joint venture that will develop two data centres in Sydney, to capture the unprecedented demand for cloud services.
This is the second major office transaction in a week after Cromwell bought 100 Creek Street from ISPT for $184.7 million, significantly above the expectations of $150 million.
Buoyed by the recent announcement it would be hosting the 2032 Olympics, the city has seen several office buildings change hands this year.
Charter Hall’s Prime Office Fund acquired the remaining 50% stake of 275 George Street for $275 million, on a core capitalisation rate of 5%.
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.
Charter Hall’s had put its No.1 Brisbane offering, comprising 217 George Street, 60 Queen Street and 231 George Street, to the market earlier this year but has reportedly decided to hold on to the asset and use it as a development play.
Dexus is shopping around the Blue Tower Complex, also in the Golden Triangle, as part of a major office tower selldown. The Blue Tower Complex comprises dual towers on 3,026 sqm of land at 12 Creek Street.
