RG Property says it repositioned the 410 Queen Street tower as a "boutique A-grade building". Photo:

Tower in Brisbane's Golden Triangle sells for $53.5m

Ingrid Fuary-Wagner|Mar 04, 2020

A prominent corner property in Brisbane’s renowned Golden Triangle has sold for $53.5 million to local development and investment group PGA Properties following a slow start to the year for the CBD office market.

The tower, at 410 Queen Street, which has a weighted average lease expiry of 2.8 years and a net lettable area of 5704 square metres, was sold by RG Property transacting on an initial yield of 5.8 per cent.

It has been very quiet in most of the CBD markets across the country so far in 2020 as investors hold tightly on to their assets. With a lower-for-longer interest rate environment, Australia’s commercial real estate market is a very attractive proposition for global fund managers – but the key challenge is where to allocate the capital given the shortage of assets for sale.

It follows a strong year for the Brisbane market, with several big-ticket sales in 2019 led by Cromwell’s acquisition of 400 George Street for $525 million and the sale of The Complex to AsheMorgan for $425 million.

Since January 2019 there have been $3.05 billion in transactions in the Brisbane CBD – up 114 per cent on the 10-year average – according to CBRE data.

CBRE’s Peter Chapple, Tom Phipps and Jack Morrison managed the expressions of interest campaign of 410 Queen Street with Mike Walsh and Peter Court from Cushman & Wakefield.

“The campaign attracted strong and qualified interest, particularly from new-entrant capital alongside existing CBD owners who have been waiting for a trophy Brisbane CBD asset,” Mr Chapple said.

“From a pricing perspective, the sale reflects the challenge of acquiring a prime corner asset in the CBD, which is noteworthy when you consider the shorter WALE of the asset and subsequent pricing assumptions buyers factored into their numbers,” Mr Walsh added.

Added value

RG Property acquired 410 Queen Street for $28.8 million in 2011 and repositioned the asset as a “boutique A-grade building”.

“Over this time we added considerable value to the property and were able to provide our investors with a solid return on their investment. We see continued growth in the Brisbane market and remain acquisitive,” RG Property’s Rhett Williams said.

Despite the buyer being a local in this instance, foreign interest in Brisbane’s CBD has ramped up with recent activity from Singapore and Germany – and more recently Hong Kong. In January Germany’s Deka Immobilien signed on the dotted line for a $380 million landmark building being offloaded by Lendlease and the Abu Dhabi Investment Authority.

PGA Property’s Frank Martinez said the group was on the look-out for further high-quality assets across the country’s CBD markets.

“We are attracted to the long-term fundamentals the Brisbane market has to offer and the unique position 410 Queen occupies in the financial precinct of the city.”