A 28-storey Brisbane office tower has sold for $113.6 million, marking the first time in 25 years the 288 Edward Street asset has changed hands.
Heitman snapped up the tower in partnership with local fund manager Marquette Properties on an 8 per cent yield.
Industry sources indicate that Marquette secured a 9,000sq m lease during due diligence with US firm Concentrix, lifting the occupancy of the asset to around 90 per cent.
The asset was just 59 per cent occupied when it hit the market in mid-2018.
Canadian property group Quadra Pacific withdrew from Brisbane’s office market last year, listing the older Edward Street asset along with a 16-storey Mary Street tower.
Marquette managing director Toby Lewis said the asset presented a good value-add opportunity in Brisbane’s CBD.
“We have exciting plans to transform the asset,” Lewis said.
“Its central position relieves leasing stress and afford us options to improve the retail podium and the public realm dramatically.”
Heitman was joined by four offshore investors on the deal.
“They all believe in the Queensland economy’s direction, the growth of Brisbane and its continued improvement in the standings of Asia-Pacific cities to invest,” Lewis said.
Marquette manages $300 million of commercial and retail assets across South East Queensland.
Heitman recently picked up the Brisbane Barracks with Fortius Funds Management and the K1 office tower in Brisbane’s Fortitude Valley from Melbourne syndicator Impact Investment Group.
Quadra acquired 288 Edward Street for $27 million in the early ’90s. The 133 Mary Street asset will settle in coming weeks.
The 288 Edward Street sale was handled by JLL agents Luke Billiau and Seb Turnbull.
Dexus Eyes $100m Sale for Brisbane Retail Centre
Dexus Wholesale Property Fund are looking to offload a 100 per cent freehold interest in Beenleigh Marketplace, a sub-regional shopping centre located 32-kilometres from Brisbane’s CBD.
The 19,476 square metre asset, which last transacted in 2013, is anchored by Woolworths and Big W and spans a 60,680sq m site.
The landholding also includes 4,390sq m of adjoining land earmarked for further development.
JLL head of retail investments Simon Rooney has been appointed to market the expressions of interest campaign amid weak sentiment in the retail property sector.
“Investors are pursuing a low-risk retail strategy at present,” he said.
Rooney said investors were targeting small and mid-sized sub-regional centres with a major focus on retail services along with food and beverage offerings.
“F&B has consistently been the fastest growing retail category over the last five, 10 and 20 years, which underpins solid leasing demand.”
Recent transactions for sub-regional centres include the Rockdale Plaza sale in Sydney purchased by Charter Hall for $142 million last month, Sydney’s Neeta City purchased by Elanor Investors for $85.3 million in March, and Melbourne’s Campbellfield Plaza bought by Charter Hall for $74 million in December last year.
Transaction activity was highest within the $50-million to $150-million bracket for retail property last year.
Rooney said the Beenleigh retail hub outperforms the industry averages with total centre moving annual turnover (MAT) of $113.7 million.
Beenleigh, located in the city of Logan, has a current population of 83,570 which is expected to increase 2.1 per cent annually to 2031.
The expressions of interest campaign closes on June 6.
Brisbane Northshore Building Snapped Up for $20m
Investment giant Centuria has purchased a recently built commercial building for $19.74 million on a 7 per cent yield in Northshore Hamilton.
Developed by Alceon Graystone in April last year, the three-level A-grade office building sits within the Brisbane Technology Park Northshore office precinct which spans 304 hectares of riverfront, located six-kilometres from Brisbane’s CBD.
The property fund purchased the newly built office, at 381 Macarthur Avenue, in a move that marks its first direct property acquisition.
Centuria head of real estate Jason Huljich said the purchase is in line with the fund’s strategy.
“We have always intended to acquire direct assets for the Fund, and 381 Macarthur Avenue is a high-quality, well-located asset with financially strong tenants,” he said.
Work kicked off transforming the expansive site of state-owned industrial port into a $5 billion mixed-use precinct in 2015, with the site said to be Queensland’s largest waterfront urban renewal precinct.
The next phase of commercial development to kick off will include four additional office developments spanning 16,000sq m, along with plans for an integrated health and medical precinct.
Huljich anticipates increasing investor demand in South East Queensland.
“The fund’s exposure to QLD follows our view that Brisbane office markets are steadily improving. In the last half we’ve seen yield compression, vacancy rates at five-year-lows, and rising demand for prime office – trends we expect to continue,” he said.
Centuria’s newly acquired 2,847sq m asset has a 5.1-year WALE. Colliers Sam Biggins brokered the deal, with settlement expected by the end of May 2019.
Abacus sells four sites worth $31m
Abacus Property Group is making good on its promise to exit residential projects.
The Steven Sewell-led funds manager has offloaded three residential development projects and a development site with a combined book value of $31 million.
The deal, expected to settle in June, has resulted in Abacus offloading the three sites in Melbourne and one in Queensland to an offshore developer.
The properties include an eight storey, $180 million apartment complex at 512-544 Spencer Street in West Melbourne on which Abacus was undertaking a joint venture with Lechte Corporation and Crema Group that included a 2100 square metre supermarket.
Another property offloaded was a controversial development in the Brisbane suburb of Alderley which Abacus successfully got rezoned from industrial to residential despite significant opposition from residents.
The 4.6 hectare Newmarket Brickworks site at 95-117 Mina Parade will be bulldozed to make way for 51 two-storey townhouses and 287 units across a building between two and five storeys.
Another permitted site is at 410 Smith Street, Fitzroy, one of Melbourne’s trendiest inner-city enclaves.
The group has also offloaded a site at 10-12 Hampstead Road, in the inner-west Melbourne suburb of Maidstone, itself undergoing a gentrification-led renaissance.
“This divestment demonstrates delivery of Abacus’ strategic objective of reducing exposure to residential,” Abacus said in a statement.
The settlement proceeds will be used to reduce debt, the group said.
Mr Sewell, who took over last year from industry veteran Frank Wolf, has said Abacus will grow its exposure to the self-storage sector and reduce its reliance on residential.
The deal reduces its residential holdings to just two remaining assets.
Last year it purchased an office tower at 464 St Kilda Road in Melbourne for $47.7 million in a 50-50 joint venture with Singapore’s Wing Tai group.
Other recent purchases include Sydney’s oldest cinemas, the historic Metro Theatre at 28-30 Orwell Street in Potts Point, which Abacus settled for $19.8 million.
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