Smorgon family exit retail property at 130 Queen Street, Brisbane
Members of the prominent Melbourne-based Smorgon family have sold their prime Brisbane retail property at 130 Queen Street in the Brisbane CBD to Brisbane-based investment manager Marquette Properties.
Marquette is understood to be in exclusive due diligence to close on the property for more than $77 million on a passing yield 5.58 per cent.
The retail property with three frontages in the heart of one of Australia’s busiest malls, Brisbane’s Queen Street Mall, features the largest McDonald’s in the southern hemisphere.
The Smorgon family are offloading the four-level centre for the first time in 23 years. The 3770 square-metre property trades seven days and sits on a 1102-square-metre site.
Aside from McDonald’s, the fully leased property also features tenants such as Gelatissimo, Forever New and Money Exchange. McDonald’s makes up 17 per cent of the property’s rental income.
Marquette, which stirred the Brisbane office market last month with the purchase of 288 Edward Street for $115 million with US real estate investment management firm Heitman, was understood to have been also actively raising capital for the purchase of 130 Queen Street.
To potential 130 Queen Street investors, Marquette proposed a $2.7 million capital expenditure program to improve the visual appeal of the mall and upgrade its amenities.
The plan will also include the lease of a vacant top floor and the renewal of Forever New’s rental space when its lease expires. It also proposes the installation of a new digital billboard.
The deal targeted the raising of $40.7 million in equity for the purchase, coupled with non-recourse debt at a loan-to-value ratio of 55 per cent. An exit strategy in the third year is on the cards.
The Smorgon family, of whom the late billionaire entrepreneur and philanthropist Victor Smorgon was patriarch, started a divestment of Smorgon Consolidated Industries in 1995 and completed this process in 2007 with the sale of Smorgon Steel to OneSteel for $2.5 billion.
Norman Smorgon and his wife, Tania, are the key Smorgon family members in the holding company Vesco Nominees, which owns 130 Queen Street.
Peter Edwards, who is head of the Victor Smorgon Group and a director of the company that owns the property, did not respond to calls.
Marquette declined to comment.
JLL’s Sam Hatcher, who handled the expressions of interest campaign for 130 Queen Street with colleagues Seb Turnbull, Jacob Swan and Luke Billiau, also declined to comment.
