GDI Property Group lists pair of Sydney and Brisbane towers
Pumped-up demand for office investments is behind property and funds manager GDI Property Group’s decision to sell a pair of office towers in the Sydney and Brisbane CBDs.
GDI has appointed CBRE to sell a tower it owns at 307 Queen St in Brisbane, while appointing CBRE and Knight Frank to market its 24-level building at 66 Goulburn St in Sydney.
Both high-profile properties are to be offered for sale via expressions of interest campaigns, which CBRE expects will see a deluge of enquiry from local and offshore buyers.
66 Goulburn St was built in 2004 above the Sydney Masonic Centre and has 23,124sqm of lettable space, most of which is currently leased to major tenants including Samuel Griffith Chambers, Government Property NSW, Prudential Investment Co, William Buck and the Copyright Agency.
Market tightens: Sydney a world-beater for office yields
Around 11,000sqm of space has been leased in the building in the last nine months, according to CBRE’s Scott Gray-Spencer, who is steering the campaign with Knight Frank’s John Bowie Wilson and Jonathan Vaughan.
“It’s a great opportunity to sell in to a market with office vacancy contracting and increasing effective rents. There is also a distinct lack of investment opportunities with just one other major Sydney CBD asset currently available for sale,” Gray-Spencer says.
“66 Goulburn St is a relatively new asset, which is well positioned to capitalise on the strong rental growth that is occurring in Sydney’s mid-town precinct.”
“The current strength in Sydney’s office leasing market will help underpin buyer interest, providing an incoming owner with an immediate opportunity to add considerable value by leasing the remaining vacancy floors and leveraging the market moving forward,” Bowie-Wilson adds.
Meanwhile, agents are also spruiking the occupancy rate at the Brisbane tower, which recently hit 85% after new leases totalling 7700sqm were inked over the last 12 months.
The Queen St tower has 19,417sqm of lettable space, including 1054sqm for retail, as well as 95 car parking spaces over two basement levels.
CBRE’s Bruce Baker, who is marketing the property with Flint Davidson and Tom Phipps, says the building has bucked a wider Brisbane trend of slow office space uptake.
“The desirability of 307 Queen St is evidenced by its recent leasing success in what has been a challenging market,” Baker says.
“Well positioned, core real estate is a rare commodity at present, with limited opportunities throughout the major capital city markets.”
The Queen St tower has also undergone $5.4 million in upgrades since 2014, which is expected to deliver a 5-star NABERS rating at its next review.
Davidson says Brisbane yields continue to deliver superior value compared with similar properties in Sydney.
“Brisbane represents a genuine value proposition, with the historic yield gap of 70 basis points having widened to be in the order of 125 to 150 basis points,” he says.