Brisbane’s IBM building touted to join redevelopment craze
Brisbane’s prominent IBM building has been listed for sale, offering investors an opportunity to tap into the local office market’s rising redevelopment trend.
Located at 348 Edward St and overlooking King Edward Park, the A-grade quality tower’s site offers the potential to develop up to 50,000sqm of gross floor area, subject to the relevant planning approvals.
Such a redevelopment or repurposing of the building could encompass residential, student accommodation, medical uses, a hotel or commercial office space.
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The listing comes after Brisbane was forecast to experience further refurbishment or withdrawal of older stock from the market due to looming vacancy as a result of the addition of some 200,000sqm of prime stock.
According to Colliers International’s CBD Office Research and Forecast Report for the first half of 2016, prime vacancy is expected to increase to about 16.5% for the first time since the early 1990s as a result of the completion of the construction of 480 Queen St and 180 Brisbane (Ann St) in the first half of the year.
The location near Brisbane’s major retail and transport amenities will be one of the key drawcards
“It is expected that pressure will continue to mount for the withdrawal for redevelopment or conversion of existing secondary stock,” the report predicts.
CBRE’s Bruce Baker, Flint Davidson and Tom Phipps have been appointed by private Brisbane-based company Harburg Investments to market the IBM building via an expressions of interest campaign that closes on March 23.
Davidson says he expects the campaign to generate interest, both locally and offshore, but particularly from Asian groups targeting Australian development and core plus repositioning opportunities.
Cox Rayner Architects have developed a residential development design for the 1349sqm site, which illustrates the potential for it to be redeveloped for alternative uses.
Student accommodation could be one potential use, particularly given Brisbane City Council’s stated goal of providing 10,000 additional student rooms in the CBD.
The site is also near the Spring Hill medical precinct, which could underpin interest in converting the building for medical use.
It is expected that pressure will continue to mount for the withdrawal for redevelopment or conversion of existing secondary stock
“The location near Brisbane’s major retail and transport amenities will be one of the key drawcards, with buyers expected to focus on opportunities to either reposition the existing asset or redevelop the entire site,” Davidson says.
Given the building has recently undergone a significant capital expenditure program, the quality of the existing 11,415sqm office building could also appeal to counter cyclical investors seeking to capitalise on a forecast recovery in the CBD leasing market over the medium term.
More than $7 million has been invested in building refurbishments and upgrades, including a new ground floor lobby and foyer, two new chillers and a refurbishment of all lift amenities on every level.
At present, IBM Australia is the building’s major tenant, providing 70% of the total building income.