Charter Hall keeps top Brisbane CBD site in sign of faith in office market
Charter Hall is punting that the next round of Brisbane office developments will be sparked by major infrastructure works and the city’s $3bn Queen’s Wharf project and will hold on to a block that could sustain a major skyscraper in the heart of the CBD.
The move is another sign of the company’s confidence in the office cycle, and it is already developing a new headquarters for Amazon in Melbourne and a major facility for Services Australia in Adelaide.
In Brisbane, a Charter Hall fund explored selling off the No. 1 Brisbane site but rather than realising their investment after securing development approval for the site the backers will now stay in the project as it readies to launch in 2023.
The new tower will sit in one of the most prominent corners in the Brisbane CBD, at the intersection of George Street and the southern end of Queen Street Mall.
No. 1 Brisbane is well positioned to capitalise on the $13bn of projects in the immediate precinct including Queen’s Wharf, Cross River Rail, Brisbane Live and the Brisbane Metro.
Charter Hall picked up the site via its No. 1 Brisbane Partnership for $94m in mid-2018. It comprises three adjoining buildings – 217 George Street, 60 Queen Street and 231 George Street – on separate titles.
Charter Hall converted the plan for an 81-storey residential tower scheme into an approval for a landmark 34-storey office and retail tower last December.
Designed by award-winning architects Blight Rayner, the approval comprises a total of 24,490sq m of office space and 2150sq m of ground floor and podium-level prime retail over four storeys as well as basement parking for 94 cars and 213 bikes
The campaign was handled by CBRE’s Bruce Baker, Peter Chapple, Tom Phipps and JLL’s Seb Turnbull and Paul Noonan.
While interest was constrained by lockdowns in other states and international borders being closed it drew competitive bidding before Charter Hall decided to retain the asset.
Charter Hall will look to win a tenant precommitment and get underway as the Queen’s Wharf precinct comes to life, which is expected to draw tenants into the area.
Ownership of the completed tower is yet to be determined and Charter Hall has a broad array of capital sources which it can draw upon and may again cast a net for backers once it gets underway.
The office development site market had been relatively quiet since the pandemic crisis began but is likely to pick up once confidence recovers. In Brisbane the market shake out is predicted to drive tenants back to the city centre from areas like Fortitude Valley as spaces open up.
Already the process to find a long-term home for up to 3000 public servants has stepped up with Brisbane City Council engaging Knight Frank to help it with future workplace needs post-Covid.
The BCC requirement has been tipped to be for about 30,000sq m to 35,000sq m.
Already in this cycle a $600m office tower being developed by Cbus Property and Nielson Properties is favoured to win the contest to house up to 4000 federal public servants in Brisbane.
That deal with federal government agency Services Australia is imminent after their 205 North Quay office tower was selected for a 35,000sq m to 38,000sq m office requirement.