Fund Manager Pays $80m for Brisbane Riverfront Offices
Perth-based Acure Asset Management is making a counter-cyclical move, paying $80 million for a five-storey riverfront office in Brisbane, two years after it was put to market.
The former Apple building at 339 Coronation Drive, Milton, was sold by a Keppel-managed private fund manager and will be added to Acure’s Brisbane Office Trust.
The A-grade building on a 5843sq m site is 2km west of the CBD and includes a central atrium, large floorplates, 315 car bays and a 5-Star NABERS Energy Rating.
Keppel purchased the unoccupied property in 2018 and repositioned it in 2021 to gain 93 per cent occupancy, a net passing income of $7,470,545 and a WALE of 3.2 years.
The sale price represents $6163 per square metre with a fully leased yield of 10.1 per cent. The sale was a 42 per cent discount to replacement cost, according to Acure.
The Singapore-based Keppel reportedly paid $40.25 million for the Brisbane-fringe property. It listed it in 2023 with a price expectation of about $90 million.
Acure Asset Management managing director Angelo Del Borrello said the final purchase price and strong fundamentals for future returns had solidified their decision.
“It has high occupancy and is in one of the country’s best-performing office markets, experiencing a strong economic outlook and coupled with constraints on new supply,” Del Borrello said.
“Brisbane has been the beneficiary of significant net migration and is seeing the benefit of a strong local economy with favourable dynamics of constrained supply and a positive outlook.
“This purchase provides our investors with the opportunity to invest in a distinctive A-grade office tower with expansive views and unrivalled access and exposure.”
The fund manager expects office vacancy to tighten even further during the five-to-seven-year investment term as well as in the lead-up to the 2032 Olympics.
Knight Frank agents Justin Bond and Matt Barker along with JLL’s Seb Turnbull, Paul Noonan and Elliott O’Shea negotiated the deal.
Barker said 339 Coronation Drive had attracted significant buyer interest during the expressions-of interest campaign, including syndicators, privates, developers and institutions.
“The scale and opportunity of this site at 339 Coronation Drive provides long-term land value preservation and potential development opportunities,” he said.
“The commercial property market has begun the recovery, with asset values having returned to growth, but there is more growth to come, presenting the buyer with an opportunity to benefit from future value uplift.”
Noonan said 339 Coronation Drive was a prominent and highly connected asset on one of Brisbane’s most-travelled roads.
“The asset has secure income from a diverse range of tenants, including ASX-listed businesses, national and international corporations and private companies,” Noonan said.
Major tenants across the five levels of 2760sq m floorplates include CPB Contractors, Holcim Australia, atWorkspaces and Toyota Finance.
Meanwhile, national charity Yourtown has listed its head office, also at Milton and next to Suncorp Stadium, in an expressions-of-interest campaign by Knight Frank closing November 19.
The three-level building on a 5694sq m corner block at 97 Castlemaine Street, Milton, was originally developed as 12 individual strata-titled suites.
Yourtown acquired the suites over time and amalgamated the site with three interconnected buildings.
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