Charter Hall zeroes in on major Brisbane office

Charter Hall’s latest aqusition at 85 George St is the third Brisbane property in the past few months.
Charter Hall’s latest aqusition at 85 George St is the third Brisbane property in the past few months.

Two Charter Hall funds have paid $60 million for a Brisbane office building directly across from the new Queens Wharf development.

The listed Charter Hall Long WALE REIT is buying a half-share in the building, with the Charter Hall Direct PFA Fund taking the balance.

The 17-storey building at 85 George St will undergo a refurbishment, expected to be completed in late January. The total cost of the building is estimated at $102.2 million, including the new upgrading work and tenant incentives.

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Nestled between the new casino and entertainment precinct and the $1 billion Brisbane Quarter development, the building has a net lettable area of 10,550sqm and 105 car parking bays. The building is expected to show an initial yield of 6% after the upgrade and a rate of almost $9700 per square metre.

The space will be leased to government tenants upon completion, with a weighted average lease term of 10 years.

Charter Hall Long WALE REIT fund manager Avi Anger says the acquisition increases the REIT’s exposure to the improving Brisbane CBD office market.

“The property should benefit from the $3.6 billion Queens Wharf development, which is scheduled for completion in 2022. This major project for Brisbane will significantly improve the amenity an attractiveness of this part of the Brisbane CBD,” Anger says.

The George St building adds to Charter Hall’s list of Brisbane property investments, which includes the recently acquired Club Hotel, Waterford and a 50% interest in 40 Tank St. The fund’s total portfolio is valued at $1.5 billion with a total of 83 properties.

The settlement of the 85 George St transaction is scheduled for October 12.

Brisbane’s office vacancies sat at 14.6% in July, down from 16.1% in January, according to figures from the Property Council of Australia.

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