This article is from the Australian Property Journal archive
BRISBANE is in the midst of a $725 million transaction boom across major office assets, with the latest deal seeing Growthpoint Properties Australia pay Charter Hall $250 million for the 100 Skyring Terrace office tower in Newstead on the city fringe, home to ASX-listed tenants Bank of Queensland and Collection House.
Meanwhile, Singaporean group ARA Asset Management and US funds manager Heitman are reportedly dealing with Canadian group Quadra Pacific on its 133 Mary Street and 288 Edwards Street towers respectively.
The negotiations follow Charter Hall itself having just paid $275 million to QIC Global Real Estate for the 17-level, 28,749 sqm tower at 61 Mary Street, which it will place in its unlisted Direct Office Fund. It had held 100 Skyring Terrace in the Direct Office Fund and its Prime Office Fund.
Growthpoint has acquired the fully leased, 24,665 sqm A-grade building at an initial yield of 6.1%, with a 7.5-year weighted average lease expiry. CBRE agents Flint Davidson, Bruce Baker and Tom Phipps negotiated the sale.
Completed four years ago, the building has a 5.5 Star NABERS Energy Rating and 5 Green Star As Built v3 rating.
Growthpoint’s purchase will be partly funded by a $135 million equity raising to be overseen by Goldman Sachs.
“The acquisition is a continuation of our strategy to acquire high-quality, modern assets located in prime markets with a long WALE and fixed rental increases, which will underpin the future growth of Growthpoint’s distributable income,” the group’s managing director, Timothy Collyer said.
Brisbane accounted for the second-highest level of office asset transaction activity across the country in the September quarter, according to CBRE’s latest Office MarketView report.
Around $4.5 billion of office assets changed hands across the country in the period. New South Wales accounted for 52% of the sales activity, with $2.7 billion of transactions, followed by Brisbane with $1.2 billion, ahead of Melbourne with $746 million.
Interest from foreign investors has propelled annual sales figures in Brisbane upwards from the $366.9 million seen in 2015. Over the 12 months to September, $1.75 billion of deals were realised, according to Knight Frank.
Offshore investors accounted for 78% of transactions in the period, enticed by its growth potential and improving leasing market conditions, according to Knight Frank.
News Corp reported yesterday that the offshore purchasers are set to outlay a combined $200 million for the Quadra Pacific portfolio. The 133 Mary Street asset has 15 levels of office space, ground floor retail and basement car park, and a net lettable area of 12,903 sqm, while the 29-level 288 Edward Street building of 19,975 sqm has ground floor retail and basement parking, and offers a value-add opportunity opposite Brisbane’s Central Station.
Charter Hall has been a busy player in Brisbane recently. Mid-year, acquired an amalgamated Queen Street Mall site known as No 1. Brisbane for $93.96 million, weeks after its Charter Hall Long WALE REIT and Charter Hall Direct PFA Fund picked up the 11-storey 40 Tank Street office building for $93.0 million.
Other major deals in 2018 have included JPMorgan Asset Management acquiring the 22-level building at 53 Albert Street in the CBD from financial services firm Challenger for more than $250 million, while Mirvac secured Asia Pacific core fund M&G Real Estate as a 50% joint venture partner for its $836 million 80 Ann St tower.
Australian Property Journal
