Brisbane office tower adds $39m in three years

The office building at 348 Edward St, Brisbane.

Listed funds manager Centuria has snapped up a Edward St tower in Brisbane’s central business district for $89 million as it boosts the size of its unlisted property empire.

The company picked up the tower at 348 Edward St from US group Hines, which bought it in 2016 for about $50 million and then overhauled.

The 15-storey office building was built in 1986 and refurbished in 2007. Hines repositioned it to capitalise on its location near Brisbane’s Central railway station. The building is also near the new King George Bus interchange.

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CBRE’s Flint Davidson, Adelaide O’Brien and Tom Phipps and JLL’s Luke Billiau and Seb Turnbull brokered the sale, which puts the jump in Brisbane office values on display.

The purchase took Centuria’s property acquisitions this financial year to more than $675m and it now has an overall funds empire of $6.6 billion.

Centuria says it will place the building into a new fund for its unlisted division. The fund is expected to launch later this month and is forecast to deliver an distribution yield of 6.25% this financial year, growing to 6.5% in fiscal 2021.

The building has a 5.1-year average lease term and is 89% occupied, underpinned by ASX-listed or multinational tenants.

Centuria joint chief executive Jason Huljich says the building is a well located, attractive asset close to surrounding amenity and transport infrastructure.

Separately, Centuria’s listed office REIT recently bought two A-grade office assets, one in Sydney and one in Perth, for a total of $380 million. It also undertook a $206 million raising to support these purchases.

Centuria’s listed industrial REIT has also settled four recent acquisitions for a total price of about $80 million.

“These acquisitions are an integral part of our group strategy to accelerate assets under management growth and we expect to continue this momentum by executing on further attractive opportunities across our real estate platform,” Huljich says.

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