CBD tower deal delivers a $40 million windfall as Brisbane office market continues its rise

A trophy boutique tower in the Brisbane CBD is set to change hands for $40 million more than it sold for only a few years ago. 

A TROPHY boutique tower in the Brisbane CBD is set to change hands for $40 million more than it sold for only a few years ago.

The deal to acquire 348 Edward St — also known as the IBM tower — has been struck by Sydney-based Centuria Capital as it continues to strengthen its office empire.

The listed company’s subsidiary, Centuria Property Funds No. 2 Limited, has entered into an agreement to acquire the A-grade asset from US-based Hines for $89 million.

It follows an intensive leasing campaign for the building and comes amid Brisbane’s rising office investment market.

Hines purchased the 15-level, 11,123 sqm tower in late 2016 for $49 million, taking its occupancy rate from 36 per cent to 89 per cent in that time.

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The Edward St asset sits on a prominently positioned 1394sq m site directly opposite Central train station and near the Brisbane Private Hospital, Brisbane Magistrates Court and Queen Street Mall.

It has a 5.1 year weighted average lease expiry (WALE) and is occupied by ASX listed or multinational tenants.

The property’s potential to accommodate up to 50,000sq m of gross floor area also adds sizeable development upside to the equation.

It acquisition will generate a new fund for Centuria’s unlisted division.

“348 Edward St is a well located, attractive asset close to surrounding amenity and transport infrastructure,” said Centuria joint chief executive officer Jason Huljich.

“This transaction grows our unlisted fund opportunities to $216 million in FY20 year to date.”

The Edward St deal is among a string of acquisitions by Centuria so far this year worth more than $675 million and brings its assets under management (AUM) to $6.6 billion.

“These acquisitions are an integral part of our group strategy to accelerate AUM growth and we expect to continue this momentum by executing on further attractive opportunities across our real estate platform,” Mr Huljich said.

CBRE’s Flint Davidson, Adelaide O’Brien and Tom Phipps were jointly appointed with JLL’s Luke Billiau and Seb Turnbull to market the Edward St tower.