BRISBANE’S strengthening office market has prompted the owner of the seven-storey, 3,000 sqm CBD building at 247 Adelaide Street to the list the asset for sale, having just completed an award-winning refurbishment.
A private owner under the entity Lake Nathan Pty Ltd is looking to divest 247 Adelaide Street through Colliers agents Sam Biggins and Tony Wang, having recently paid $9.8 million for the 12-storey value add investment at 26 Wharf Street.
Anchored by Bendigo Bank, 247 Adelaide Street is in the heart of the Golden Triangle and is one of only two privately held assets on the CBD block bounded by Adelaide, Creek, Queen and Edward Streets. It has a staggered lease expiry profile, weighted average lease expiry of 3.63 years.
More than $2 million in capex work has been put into 247 Adelaide Street by the current owner, with works to building services including a new chiller, lift controllers and car upgrades, end of trip, lobby and bathroom refurbishments. The works were recognised with an AIRAH award and was a finalist at the 2014 National Property Council of Australia awards.
Brisbane is currently witnessing a circa $46 billion infrastructure boom, with interstate migration driving population growth, while demand for office space has forced vacancies down and rents are entering a growth phase.
“The value proposition of the Brisbane CBD office market is clear with yield spreads in the range of 25 basis points to 120 basis points over the Sydney and Melbourne CBD office markets,” Biggins said.
Wang said that given the tightly held nature of privately owned office assets in the Golden Triangle, it is anticipated the likely buyer may be a private investor or family office adopting an intergenerational investment horizon.
Brisbane City Council’s recently announced Adelaide Street Vision Priority Project is expected to bring widened footpaths, the planting of mature trees and increased pedestrian connectivity near the front of the property.
Colliers is also marketing 116 Adelaide Street, with the expressions of interest campaign closing on 19th June. Colliers is representing Malaysia-based HCK, which was also the vendor of 26 Wharf Street.