The Primary Industries building 71-97 Turbot Street, part of the site sold to Mirvac for $79 million. Photo: Robert Shakespeare

Mirvac strikes $79m deal to buy two Brisbane CBD sites

Larry Schlesinger|Apr 17, 2019

Mirvac has agreed to buy two prime neighbouring Brisbane CBD sites from listed Singaporean developer Wee Hur for $79 million.

The put and call option agreement covers a site of more than half a hectare between Turbot and Ann Streets adjacent to Brisbane City Hall and is contingent on approval from Wee Hur shareholders and Mirvac securing Suncorp as the tenant for a new office tower on the site.

A previous agreement between Wee Hur and Mirvac, approved in April by Wee Hur shareholders was for Mirvac to acquire only the 3690 square metre site at 62-80 Ann Street for $65 million with Wee Hur to retain 71-97 Turbot Street, a 1788sq m site where it had sought approval for a 36-storey student housing tower with more than 900 rooms.

In a statement, the board of Wee Hur said the sale of both sites was “in the best interest of the group” with the proceeds to be used for other developments in Australia.

The deal with Wee Hur and Mirvac comes a day after The Australian Financial Review reported that Singaporean government’s sovereign wealth fund, GIC – in a counter-cyclical swoop – purchased the 32 Turbot Street Brisbane headquarters of Santos for $370 million on a yield of 5.7 per cent, the largest office deal in the city this year.

Brisbane remains one of the country’s weakest office leasing markets with a vacancy rate of almost 16 per cent, according to the Property Council’s Office Market Report, though many believe it has bottomed out. The Australian Tax Office currently has a tender in the market for up to 24,000sq m of office space.

In her AGM address to shareholders last month, Mirvac CEO Susan Lloyd-Hurwitz said the company would continue to allocate 75 per cent of its capital to Sydney and Melbourne, “while remaining agile to strategic opportunities in Brisbane and Perth”.

Wee Hur, which is undertaking a massive 1500-room student housing project in Buranda near Woolloongabba, snapped up the two CBD sites, which include the eight-storey Primary Industries Building and parts of the original Brisbane Fruit and Produce Exchange, from QIC for $63 million two years ago.

Should Wee Hur shareholders approve the agreement with Mirvac, it can become a binding contract either through Mirvac exercising its call option by May 31 (this can be extended by three months if Mirvac has lodged a development application for the site) or by Wee Hur exercising its put option within 14 days of Mirvac securing a leasing deal with Suncorp.

Should the new put and call option agreement not proceed, the previous agreement for Mirvac to acquire only the Ann Street site for $65 million will remain in place.