This article is from the Australian Property Journal archive
AFTER attracting strong interest from investors, an inner-Brisbane office building has sold for $25.15 million, as Queensland’s economy continues to prove itself resilient to challenges.
The five-storey building, located at 88 Jephson St in Toowong, was last sold in 2019 as part of a larger amalgamated site of 1.3 hectares to the State Development Corporation and White & Partners from Stockland.
The first floor was again sold in February of 2020, after refurbishments and $600,000 on capital improvements.
This latest sale was negotiated by Christian Sandstrom and Matt Barker of Knight Frank in conjunction with Tom Barr and Jason Hines of Ray White.
The $25.15 million sale price represented a rate of $3,904/sqm of net lettable area on a WALE of 1.89 years.
Major tenants within the building include insurance provider Compare the Market, engineering design consultancy Webb Australia, Allsports Physiotherapy and Body Corporate Services.
The property adjoins the recently approved Toowong Town Centre, a $450 million development. With the proceeds from the sale of Jephson St to be used by the vendor to develop the town centre, which will be a mixed-used development including a cinema, apartments, a hotel, gym and childcare facility.
This is the first acquisition of commercial property for the buyer, an offshore investor with property interests on the Gold Coast.
“The purchaser, who only recently settled on the acquisition, believes that as a result of COVID and a rethink by businesses on the most suitable location of their office accommodation, business hubs like Toowong will see an increase in tenant demand,” said Sandstrom.
“We received over 160 enquiries and at the close of the campaign received seven competitive offers.”
The five-week Expressions of Interest campaign targeted owner occupiers, investors and developers.
“The Toowong opportunity generated strong interest from both local and interstate groups looking for existing office buildings that allowed the opportunity to add further value through implementing a repositioning program in addition to longer-term future development upside,” he said.
“The purchaser, who only recently settled on the acquisition, believes that as a result of COVID and a rethink by businesses on the most suitable location of their office accommodation, business hubs like Toowong will see an increase in tenant demand.”
The property has a total net lettable area of 6,441sqm and secure parking for 136 vehicles, with the site comprised of 4,118sqm. Subject to council approval, the local plan allows for future development of up to 20 storeys.
“Queensland had the highest net interstate migration of any state or territory in 2019, and our view is that this will rebound very strongly in 2021 now that interstate border controls have lifted,” said Barr.
“The current infrastructure boom in South East Queensland will further reinforce Brisbane as an investment destination of choice for domestic and offshore capital. This was evidenced by two of the seven offers on 88 Jephson Street, Toowong coming from Hong Kong-based family offices,” he said.
“We have experienced a significant uptick in transactional activity across the market over the past two months or so and anticipate this to continue into 2021.”
