More than $600m in office towers will sell in the first quarter as the Brisbane CBD comes back to life

Despite the lingering impacts of the pandemic the Brisbane CBD is stirring back to life with millions of dollars of office towers set to sell and Government and businesses looking to upgrade.

THE Brisbane CBD office market has kicked off 2021 with a surge of investment activity and requirements.

After a bleak 2020 weighed down by the coronavirus pandemic more than $600m worth of office towers are expected to be transacted by the end of March and there are thousands of square metres of requirements in the market ready to be finalised.

Local investment company Marquette Properties is due diligence to buy the 32-level Gold Tower at 10 Eagle Street for about $285m, while Sydney real estate investment group AsheMorgan is looking to buy Cornerstone Properties’ 310 Ann Street for about $210m.

The Gold Tower at 10 Eagle Street in the Brisbane CBD.

Also, industry sources say Cromwell Property Group is in due diligence to buy 545 Queen Street for between $116m and $120m.

The State Government has announced that Mirvac is the successful proponent for the proposed $670 million redevelopment of the old dental school at 200 Turbot Street while Charter Hall is paying about $65m for a development site at 309 North Quay.

Commenting on the CBD market’s momentum Savills Australia managing director QLD Anthony Ott said the impact of COVID-19 and the work from home debate, heavily impacted leasing activity last year which in turn created uncertainty in investment markets.

“As a result, the CBD market only had one asset trade in the 2020 calendar year,” he said.

Cornerstone Properties’ 310 Ann Street office tower.

Mr Ott said the lack of transactional evidence exacerbated the pricing gap between vendors and purchasers’ expectations. “As we see more sales activity, we expect to see more alignment of expectations,” he said.

The occupier markets were also showing increased activity with Services Australia seeking 35,000sq m while there are a number of new requirements of more than 1000sq m including Worley Parsons, APA Group, Bechtel and Ord Minnet.

“That’s giving the market a bit of a boost in confidence that activity is returning,” Mr Ott said.

“While investors will remain cautious of how they price assets with short term cash flow risk, the improvement in leasing demand is improving confidence and there is a good level of activity from buyers looking for opportunities to invest.”