A-Grade Brisbane Office Tower Sells For $126.7 million

An A-Grade Brisbane CBD Tower has recently sold to Australian property development and investment group, KYKO, for $126.7 million amid heightened interest in Brisbane CBD investment opportunities.

The central office tower was highly contested with five local groups and three international submitting contestable offers. The property drew attention due to its strong tenancy profile (currently 87% occupied), core CBD location.

“When we look around the country, Brisbane is one of the most heavily traded markets in 2019 with investors finding favour in higher returns and improving fundamentals. We anticipate similar transaction volumes in the second and third quarter,” CBRE Selling Agent Flint Davidson commented.

The property was previously held by Fortius Funds Management and two private funds managed by BlackRock. It offers a net lettable area of 13,291sqm and retains tenants including Anglo American Metallurgical Coal, the world’s 3rd largest metallurgical coal mining company, who have recently recommitted to the lease until 2028.

CBRE agent Tom Phillips notes that improving occupancy rates throughout the city have raised the profile of Brisbane as a desirable investment destination.

“With the largest decline in vacancy of any major Australian CBD in the past 12 months, Brisbane is experiencing a dynamic economic recovery aided by forecasts that growth in Queensland’s Gross State Product will outpace the rest of the nation at 3.4% over the next five years,” Mr Phillips added.

“This, coupled with significant yield spreads to Sydney and Melbourne, is attracting buyers to Brisbane as a value proposition with genuine growth prospects.”

Mr Phipps added that the transforming location around 201 Charlotte Street had been another attraction for buyers, with the tower set to directly benefit from city shaping projects including Cross River Rail, the Waterfront Precinct and Queen’s Wharf Integrated Resort and Casino.

The property was sold by CBRE’s Flint Davidson and Tom Phipps in conjunction with Justin Bond and Ben McGrath of Knight Frank.