Lendlease has bought into Brisbane’s Olympian dream through its new $1.5 billion opportunity fund, Real Estate Partners 4, partnering with Marquette Properties to buy the so-called Dexus “Blue Tower” at 12 Creek Street for $391 million.
The property first went to market in August last year with a price guide of $450 million and is understood to have had serious early interest from Arrow Capital Partners with backing from Starwood Capital.
But that did not go ahead, with Marquette filling the breach and selling its vision for the building – which includes a $25 million repositioning plan – to Lendlease, which has 49 per cent of the partnership.
The balance is held by Marquette and a syndicate of 180 investors it pulled together to seal the deal with Dexus, which was facilitated by Justin Bond and Paul Roberts from Knight Frank and CBRE agents Bruce Baker and Flint Davidson.
Marquette now controls four buildings in the Brisbane CBD, including the “Gold Tower” at 10 Eagle Street, which it bought from Dexus and CPP Investment Board for $285 million last year.
Toby Lewis, managing director of Marquette, said he was “really excited” to be working with Lendlease, which fully endorsed the upgrade strategy in a city awash with 39 A-grade buildings, of which Blue Tower is one, but only a handful of premium offices.
“There’s only five premium-grade buildings in Brisbane and four of them have never sold, there’s great scarcity,” Mr Lewis said.
“So we want to elevate ourselves out of A-grade into premium grade, and we think that the building has all the attributes to that, we just have to tinker with it.”
In another major Brisbane CBD sale, global asset manager Mercer has bought the 25-storey office tower at 179 Turbot Street from KWAP, Malaysia’s largest public services pension fund, for $155 million.
The sale amount is well under the $172 million KWAP paid for the asset in 2013, reflecting its occupancy rate of about 50 per cent.
Brisbane market sources say KWAP adopted an inflexible rental strategy in which it opted not to meet the market in a city with routinely high vacancy rates, leading to a gradual exodus of tenants.
They say it remains an attractive, good-quality building with ample scope for Mercer and asset manager Investa to quickly boost current occupancy through a strategic leasing campaign.
Meanwhile, two new office assets in Fortitude Valley close to the Brisbane CBD have come on to the market, which has been buoyed by Brisbane winning the hosting rights for the Olympic Games in 2032.
AXA Investment Managers has listed Green Square South Tower at 505 St Pauls Terrace with a price guide of around $200 million.
It is being marketed by Tom Phipps, Bruce Baker and Peter Chapple from CBRE, and JLL’s Seb Turnbull and Paul Noonan.
Nearby, the HQ South Tower at 520 Wickham Street is also up for sale with a guide of $140 million. CBRE and Knight Frank are marketing the property, owned by M&G Real Estate, which occupies a 3000 square metre site.
Article Source: www.afr.com