Mirvac sells Brisbane office tower and car park to Alceon for $124m

Alceon has bought 410 Ann Street and the Cathedral Square car park in Brisbane from Mirvac.

Mirvac has pushed through a major Brisbane deal despite uncertainty across the office market, with Alceon buying a tower in Ann Street and the Cathedral Square car park for $124m.

The sale is a breakthrough for the Queensland capital where a series of syndicators have gone into due diligence on offices only to retreat amid rising interest rates.

Mirvac offloads Brisbane office tower and car park to Alceon for $124m.

The slowdown is also hitting lower-end buildings in Sydney and Melbourne that were part of the wave of more than $10bn of towers to hit the market in this half.

Mirvac’s sale comes ahead of the property developer’s update on Thursday on its operations, where it will detail its exposure to the fall-off in demand on housing estates, as revealed by rival developer Stockland on Monday.

The purchase, brokered by CBRE’s Peter Chapple and Bruce Baker and JLL’s Paul Noonan and Jack Sullivan, locks in Alceon’s growth in Queensland, where its local team now manages a portfolio of more than $1.25bn in real estate.

The property it bought, 410 Ann Street, is a twin-tower B-grade office complex spanning more than 20,000sq m with 139 car park bays on a 4052sq m freehold site. The adjoining Cathedral Square car park is on a 8949sq m leasehold set to expire in April 2108 and includes 572 carparking bays.

The sale was struck at an improved rate of about $6000 per square metre, or less than $4000 per sqm, when normalised for excess cars, and a fully leased yield of 11 per cent.

The offices are about 90 per cent leased to tenants including the Public Trustee of Queensland, First Parking, Mipac, Sonic Healthplus and Dye & Durham, contributing to a weighted average lease expiry of four years.

The asset, picked up as part of the Westpac Office Trust portfolio was held by a Mirvac managed account.

Alceon’s Queensland head Todd Pepper said the acquisition reflected the kind of opportunity Alceon specifically targets.

“This is a well-located asset that has been under-managed for some time,” he said. “Our plan is hands-on: invest in the building, lift the tenant experience and lease it up into a market where good space is getting harder to find.”

Alceon chief executive David Gribble said the deal demonstrated both the firm’s momentum and its conviction in Queensland.

“Alceon continues to grow, and Brisbane is a big part of that story,” he said. “We can move decisively because our investors trust our team and we invest our own capital alongside them. We have deep confidence in Brisbane, in Queensland and in this asset.”

Population growth in southeast Queensland, along with Olympic and infrastructure investment, including the Cross River Rail and Brisbane Metro, are underpinning long-term demand for office space in the city.