Activity ramps up in Brisbane's Golden Triangle

The biggest sale recorded over the past financial year was 201 Charlotte Street in May to Sydney-based investor Kyko Group for $126.7 million, on an initial yield of 5.94 per cent.

The latest office tower to hit the market in the Golden Triangle is a 14-storey, 5700-square-metre building at 410 Queen Street, which is expected to sell for more than $50 million.

Perth-based investor RG Property bought the corner property in 2011 before spending more than $5.5 million upgrading it.

“This investment has come towards the end of its desired eight-year cycle. We remain acquisitive and are looking to re-allocate capital towards other value-add opportunities within the Brisbane market, in addition to other projects we have around the country,” RG Property’s Rhett Williams said.

Investment in the Brisbane office market has gone gangbusters with a total of $2.8 billion spent over the last financial year, according to Cushman & Wakefield’s Mike Walsh. He is selling the property with Peter Court along with CBRE’s Tom Phipps, Peter Chapple and Jack Morrison.

“With ongoing institutional investment into the precinct, we expect investor interest for assets specifically within the Golden Triangle to remain heightened,” Mr Walsh said.

Other investors
Several of Australia’s largest landlords have invested in the precinct, including Dexus, which owns a 32-level tower at 480 Queen Street, and Charter Hall and Investa, who have proposed to build a 40-storey tower at 370 Queen Street.

Meanwhile Lendlease and the Abu Dhabi Investment Authority have joined forces to sell their asset in the Golden Triangle – a 30-floor building at 66 Eagle Street – which is understood to be worth about $370 million.

Compared to five sales in the Sydney core financial district in the first half of this year the Golden Triangle has recorded three, which, relative to the small area it encompasses, is punching above its weight.

“In Sydney, while 2019 is on track to record fewer CBD core transactions than last year, there have been a few landmark ones such as the 50 per cent stake in the MLC Centre and the recent 50 per cent stake in Chifley Tower,” Rhys Byrne senior research analyst at Cushman & Wakefield said.

Mr Byrne said there was significant demand from foreign capital looking to invest in Australia as bond yields and central bank cash rates around the world trended downwards, and that Brisbane was particularly attractive, given the potential yields on offer.

“Of the 10 transactions in Brisbane’s Golden Triangle from the start of 2018 to the midpoint of 2019, 81 per cent of the volume was from foreign investors. That fits the broader trend that we are seeing in the national office market, where foreign investment in office property increased to 49 per cent in FY19,” Mr Byrne said.