Dexus and CPP Investment Board have put the Gold Tower in Brisbane on the market.
The listed Dexus and Canada’s CPP Investment Board are looking to offload Brisbane’s $300m Gold Tower in the city’s largest office sale of the year.
Smaller buildings are in play, including ESR’s offer of the State Law Building, but the Brisbane CBD office market has been quiet in the wake of the coronavirus hitting.
Dexus and the Canadian fund now want to sell the 32 level A-grade commercial building in the heart of the city’s Golden Triangle at a time when few other Brisbane assets are for sale.
Dexus has been selling buildings near book value during the crisis and believes that they will mainly hold their values.
Known as The Gold Tower due to its distinctive colour, the island site also offers buyers the chance to add value via the development of an annex or extending the podium floor plates.
When completed in 1978, 10 Eagle Street was Brisbane’s tallest building, and it comprises about 27,826sqm of net lettable area.
The property has 247 secure car bays, a 5-Star NABERS Energy Rating, and is 91 per cent occupied.
Knight Frank and Savills are handling the sale.
“While investor interest in Brisbane has continued during COVID-19, there has been limited availability of quality investments for sale,” Knight Frank partner, capital markets, Justin Bond, said.
No institutional office transactions have occurred in the Brisbane CBD since the sale of 66 Eagle Street in late 2019, which was picked up by Deka for $380m.
“This asset is expected to attract strong pent-up demand from both offshore and domestic investors, with the biggest drawcards being the prime Eagle Street position, diverse income profile and future development upside,” he said.
Mr Bond said investment activity in Sydney and Melbourne had resumed and he expects Brisbane to follow, particularly for assets within the Golden Triangle.
“While demand was particularly strong from overseas investors pre-COVID, we continue to receive significant inquiry from cross-border capital this year, but a lack of investment opportunity in Brisbane has prevented transactional deal flow,” he said.
Anthony Ott, state managing director Queensland for Savills Australia, said the location of the building, right in the heart of the Golden Triangle and in a premium position along the tightly held Eagle Street, presents a rare opportunity for investors.
“Investors will be drawn to not only the premium location, but the future development opportunity to add another building on the site or perhaps extend the floor plates,” he said.
The property is near major CBD infrastructure projects in Brisbane, with $12.8bn in developments, including the Cross River Rail and the waterfront precinct redevelopment, driving the area.
Mr Ott said the asset fundamentals of the 10 Eagle Street tower also complimented Brisbane’s most active tenant market at the moment, in the 200sq m to 1500sq m size range.
