Brisbane office block falls to Australian Unity for $80m

The property at 15 Butterfield St in Brisbane last traded in 2009 for just under $70 million.

Funds manager Australian Unity is looking to boost its commitment to Brisbane with the purchase of an $80 million office block near the Royal Brisbane Hospital from wealthy Queensland investor Clive Berghofer.

The deal, which is yet to close, could fuel the expansion of Australian Unity’s unlisted healthcare property trust, as the 11,200sqm ­office complex is occupied by the Queensland Department of Health on a long-term lease.

The Butterfield St building, which is close to the Royal Brisbane and Women’s Hospital, is slated to become part of Australian Unity’s expanding Brisbane holdings.

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The $810 million Healthcare Property Trust invests in healthcare related property assets with a focus on regular income, plus the opportunity for long-term capital growth. The trust’s tenants include hospital, medical and aged care operators.

The group is also part of one of the two consortiums vying for the Herston Quarter redevelopment, which will see the 4.8ha site overhauled.

The race for development rights for the hi-tech medical and commercial precinct was last ­October narrowed down to just Frasers Property, which joined forces with Australian Unity, and a joint bid put forward by Lend Lease and Trinity Health.

Devine Constructions fitted out the office at 15 Butterfield St in 2009.

Devine Constructions fitted out the office at 15 Butterfield St in 2009. Picture: Devine Constructions.

The site in inner Brisbane represents one of the most high-profile development opportunities in southwest Queensland, and comes as more developers are looking for exposure to the medical space.

The short-listed proponents are due to submit their full proposals by the second quarter of 2016 with a successful proponent to be unveiled in mid-2016.

For Berghofer, the sale of the office block at 15 Butterfield St will represent a handy profit since his 2009 purchase of the asset for $67.5 million.

The 11,200sqm ­office complex is occupied by the Queensland Department of Health on a long-term lease

The building, developed by the troubled Devine Limited, last traded on a yield of 7.8% and the latest deal, being brokered by Mike Walsh and Peter Court of CBRE, is being struck at a tighter level. The parties and agents declined to comment.

Healthcare property is being rerated across the country in a series of recent deals. Sydney boutique Barwon Investment Partners picked up the New­market Medical Centre in Brisbane for its unlisted Healthcare Property Fund.

Barwon’s wholesale fund plans to acquire more than $100 million in healthcare real estate assets over the next two years.

Impact Investment Group also boosted its property funds management empire to almost $400 million with the purchase of the Gold Coast Surgical Hospital for $45.8 million.

The acquisition was on a net passing yield of about 7.1% in a deal brokered by Savills.

This article originally appeared on www.theaustralian.com.au/property.