This article is from the Australian Property Journal archive
RG Property has acquired $15.8 million historic Fortitude Valley office complex, as the inner Brisbane suburb thrives.
The complex, located at 37 Kennigo Street, consists of three buildings across 5,094sqm of inner-city land holding and boasts dual street frontages and is partially heritage listed. The site was originally constructed in 1916 and functioned as the Keating’s Bread factory.
The sale was negotiated by Jack Morrison and Peter Chapple from CBRE, in conjunction with Peter Court and Mike Walk from Cushman & Wakefield.
“We’re excited by the medium and long term potential of this asset as the Fortitude Valley region continues to go from strength to strength. Securing this large landholding puts us and our investors in a strong position to capitalise on the continued growth in the Fortitude Valley market, which is emerging as a natural extension of the Brisbane CBD,” said Rhett Williams, CEO of RG Property.
The complex was redeveloped in 2008, 2017 and again in 2020, with the three buildings consisting of approximately 2,955sqm of quality office space, in addition to 46 car spaces.
“Assets such as 37 Kennigo Street, which offer a level of uniqueness and character, are in high demand as buyers seek to add a mix of asset types to their portfolios. This underpinned interest in the sale campaign, given the current tenant and buyer interest in well-appointed heritage assets,” said Morrison.
Tenants of the complex include Hassell Architects, as well as small occupiers such as software companies, marketing firms and financial services companies, providing varied lease expiry over three years and a diversified income stream.
Court noted that the sale came after a surge in buyer enquiries from a range of syndicates and investment clubs.
“We saw an increase in demand towards the back end of 2020, a theme that has increased in early 2021 and looks set to continue as buyers view the current market conditions with more certainty,” said Court.
The transaction comes after RG Property’s 2020 $53.5 million sale of Brisbane’s 410 Queen Street office building, which was acquired by the group for $28.8 million in 2011.
The inner suburb of Fortitude Valley has continued to show strength after construction began on Consolidated Properties Group’s $260 million 895 Ann Street office tower, as confidence remains unwavering in Brisbane’s office market with Cromwell’s extensive refurbishment of 400 George Street.
This despite rising office in the Brisbane CBD, as Property Council Office Market Report, rates climbing from 12.9% to 13.6% in the six months to January 2021.
