Demand keeps powering Brisbane’s office market
Strong demand continues to spur turnover in Brisbane’s office market, with local investment fund Sentinel Property Group and the Brisbane council’s investment arm buying into towers in the city.
Sentinel is in negotiations to purchase the Spring Hill office tower at 200 Creek St for about $35 million, while the City of Brisbane Investment Corporation is taking on a 50% stake in the Valley Heart portfolio for about $61.5 million.
Both include office components and have potential for future residential development.
Eager investors: Big office buy-up continues in record run
Sydney investment fund Ashe Morgan bought the Valley Heart portfolio last year for $79 million but has since invested up to $20 million in the portfolio of assets that front onto Fortitude Valley’s Chinatown mall.
It includes the office tower TC Beirne building, and a 464-space car park underneath the landholding spanning the Chinatown and Brunswick Street malls.
The location is less than 2km from the central business district and plans had been devised for a major apartment development.
Meanwhile, a fund-managed by Centuria Property Group is selling the 200 Creek Street
10-storey office tower, which includes 7635sqm of office space and a shared basement with the neighbouring Novotel Hotel on the 1144sqm site.
Agents CBRE and JLL declined to comment while representatives from Sentinel and Centuria also declined to comment.
The Brisbane office market, which continues to record double-digit and rising vacancies, also offers continued strong yields compared to assets in the southern markets.
Last month, Abacus Property Group and Investec’s Australia Property Fund bought the
26-storey, B-grade office tower at 324 Queens St for $132 million
Other sales include the HSBC Tower to Singaporean ARA Asset Management for $188 million and Primewest’s purchase of 308 Queen St.
QIC sold a former state-government building at 41 George St for $159.8 million to AEP Investment Management.
A measure of the market will be taken with the sale, through JLL and CBRE, of Blackstone’s portfolio of office towers that the company acquired after the takeover of Valad Property Group in 2011.
It includes four Brisbane office blocks — 370 Queen St, 127 Creek St, 339 Coronation Drive and 40 Tank St — that are likely to be sold individually.
– with Ben Wilmot
This article originally appeared on www.theaustralian.com.au/property.