A refurbished and re-leased CBD office tower has sold for $45m more than when it last changed hands less than four years ago

The owners of a Brisbane CBD office tower will be counting their money after selling their asset for a whopping $45 million more than they paid for it less than four years ago.

201 Charlotte St, in the Brisbane CBD.

A SYDNEY-based property and investment group has settled on the acquisition of a refurbished Brisbane office tower for $45 million more than when it last changed hands less than four years ago.

Kyko Group paid $126.7 million for the 16-storey tower at 201 Charlotte St tower in a deal that reflects heightened interest in Brisbane CBD investment opportunities.

CBRE’s Flint Davidson, who marketed the property with colleague Tom Phipps in conjunction with Justin Bond and Ben McGrath of Knight Frank, said the campaign attracted five local bids and three international offers.

He said the interest was underpinned by the property’s strong tenancy profile, core CBD location and the current strong investor focus on Brisbane investment opportunities.

“When we look around the country, Brisbane is one of the most heavily traded markets in 2019 with investors finding favour in higher returns and improving fundamentals,” he said.

“We anticipate similar transaction volumes in the second and third quarter.”

According to CoreLogic the property last sold in 2015 for $81.57 million when it was bought by Fortius Funds Management and two private funds managed by US investment giant BlackRock. At the time the yield was about 8 per cent.

The tower was bought as a value-add proposition being 20 per cent vacant and with anchor tenant Anglo American Mettalurgical Coal’s lease nearing expiry.

The building is currently 87 per cent occupied and offered a weighted average lease expiry of five years following Anglo’s recent recommitment to the property until 2028. The current sale price translates to an initial yield of 5.94 per cent.

With a net lettable area of 13,291sq m, the building has also benefited from a recent $5 million refurbishment which has established the tower as a lifestyle hub, offering childcare facilities, an F45 gym, cafe, end-of-trip facilities and a valet car service.

Mr Phipps said Brisbane’s strong underlying economic fundamentals was a key drawcard for prospective purchasers.

“With the largest decline in vacancy of any major Australian CBD in the past 12 months, Brisbane is experiencing a dynamic economic recovery aided by forecasts that growth in Queensland’s Gross State Product will outpace the rest of the nation at 3.4 per cent over the next five years,” he said.

“This, coupled with significant yield spreads to Sydney and Melbourne, is attracting buyers to Brisbane as a value proposition with genuine growth prospects.”