HAVING just netted $925 million from the sale of Sydney’s Grosvenor Place, Dexus is looking to direct further capital to its development pipeline with Brisbane’s distinctive “Gold Tower” its latest asset on the block.
Positioned in the heart of the city’s Golden Triangle, the 32-level, A-grade commercial building has a distinctive gold colour and is perched on an island site of 3,477 sqm at 10 Eagle St.
The tower was Brisbane’s tallest building on completion in 1978. It offers about 27,826 sqm of net lettable area with typical floor plates of 950 sqm, and with 247 car bays and a 5-Star NABERS Energy Rating.
It is being offered by Dexus and its office partner with 91% occupation by income.
Value-add potential can be unlocked via the development of an annex adding to the podium floor plates.
Knight Frank and Savills have been appointed to market the asset via expressions of interest campaign, closing 16th December.
Dexus has just offloaded a 50% share of the Grosvenor Place tower to co-owner, China Investment Corporation, in one of Australia’s biggest commercial deals of the year. It also recently offloaded the 452 Flinders St city building in Melbourne for more than $450 million, as it moved forward with its plans for developing a $2.5 billion tech precinct around Sydney’s Central with Frasers Property Australia.
Brisbane market activity resuming
Justin Bond of Knight Frank said the offering of 10 Eagle St was the most significant investment opportunity to be offered to the Brisbane market during 2020.
“While investor interest in Brisbane has continued during COVID-19, there has been limited availability of quality investments for sale,” he said.
The COVID-19 pandemic quelled Brisbane’s hot streak of transactions that ran through until the end of last year. Bond said no institutional office transactions have occurred within the Brisbane CBD since the sale of 66 Eagle St in late 2019.
“As such this asset is expected to attract strong pent-up demand from both offshore and domestic investors, with the biggest drawcards being the prime Eagle Street position, diverse income profile and future development upside.”
Recent Real Capital Analytics data also shows international travel restrictions have dragged down Australia commercial property activity in the September quarter. While by some measures Australian offices remain the most attractive property asset class, however e-commerce and logistics trends accelerated by the COVID-19 pandemic has propelled industrial asset transaction volumes past office deals for the first time in almost 10 years.
Bond said investment activity in Sydney and Melbourne has resumed and expects Brisbane to follow, particularly for assets within the Golden Triangle.
“The significant infrastructure investment within the Brisbane CBD, along with long term population growth, stable governance and Australia’s safe haven status, will encourage further investment into Brisbane.
There is some $12.8 billion in developments within a kilometre radius, underpinned by the Cross River Rail and the waterfront precinct redevelopment.
Savills’ Anthony Ott said investors would be drawn to the premium location, as well as development opportunity to add another building on the site or extend the floor plates. He added that asset’s fundamentals of 10 Eagle St also complemented Brisbane’s most active tenant market at the moment, in the 200 sqm to 1,500 sqm size range.