A render of the approved residential development at 171 Edward Street, Brisbane. Photo: Supplied

Dexus buys prime Brisbane site with skyscraper potential

Ingrid Fuary-Wagner|Sep 26, 2019

Property giant Dexus has scooped up a prime Brisbane CBD property ripe for development with approval for a 274 metre skyscraper and is in talks with its Catholic Church neighbour to engage in a larger joint venture.

The off-market acquisition at 171 Edward Street, a retail building in Brisbane’s Golden Triangle, is for more than $80 million, on a yield of under 5 per cent.

The asset is being sold by residential developer Aria Property Group, run by Brisbane rich-lister Tim Forrester, which in 2016 gained approval for an 81-storey residential tower with shops and 642 apartments.

The building is tenanted by several luxury retailers including Singapore-listed watch brand The Hour Glass and Hermes, the latter of which recently signed a new 10-year lease, essentially providing Dexus with a secure, passive investment with huge development potential.

Given Dexus’ track record it’s likely it would build a commercial skyscraper rather than the approved residential tower.

Neither Dexus nor Aria Property Group would comment. Knight Frank’s Justin Bond is understood to have brokered the deal.

It is understood Dexus is in talks with the Catholic Church, which owns several neighbouring properties on Edward and Elizabeth streets, including the heritage-listed Cathedral of St Stephen.

The Catholic Archdiocese of Brisbane most recently bought 131 Edward Street for $29.5 million. If a partnership were formed, the potential scale of any future development would be significant.

ASX-listed Dexus is positioning itself strongly in the Brisbane market. Last year it picked up a key site with development potential, the Audi Centre in Fortitude Valley at 586 Wickham Street, for $91.2 million, on an initial yield of 6 per cent.

But Dexus’ immediate focus in Brisbane is on its $1.4 billion Waterfront Precinct project on the city’s Eagle Street Pier. Dexus bought the 40-storey office tower in 2015 for $650 million from Stockland and has plans for a mixed-use precinct with two new towers, riverfront dining and retail and 1.5 hectares of public open space.

Other large property players are also determined to put their stamp on Brisbane’s CBD. Mirvac is building an $800 million development with a 32-storey commercial tower at 80 Ann Street which will cover an entire block.

Charter Hall and Investa are also proposing a joint venture project in the Golden Triangle at 370 Queen Street that would include a 40-storey office tower, retail laneway and public piazza, expected to be worth about $650 million on completion.