Syndicator swoops in $37m deal signalling Brisbane’s business parks are back in demand

Deals are being done in Brisbane’s business parks amid rising demand for collaborative working hubs with corporate appeal.

Peter Chapple from Savills and Knight Frank’s Matt Barker say demand for business park assets is on the rise.

BRISBANE’S business parks are back in … well, business.

The campus-style commercial hubs are experiencing renewed levels of sales and leasing activity amid rising demand for collaborative workplaces with corporate appeal and amenity.

In one of the latest transactions, a two-level building has changed hands within the tightly held Southgate Corporate Park at Cannon Hill in the city’s inner-east.

Sydney-based syndicator Aviator Capital has acquired the fully leased, 6028sq m A-grade asset at 19 Corporate Drive for $36.95 million from Centuria Property Funds Limited.

The purchase follows two other Brisbane acquisitions by Aviator — 240 Waterworks Rd, Ashgrove, and 77 Hudson Rd, Albion.

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Knight Frank’s Matt Barker, Justin Bond and Christian Sandstrom, along with Savills’ Anthony Ott and Peter Chapple, negotiated the deal.

Mr Barker said investor interest fielded during the four-week expressions of interest campaign exceeded expectations.

“We had strong inquiry throughout the campaign, with interest coming from a mix of privates, syndicators — both local and interstate — and institutional buyers,” he said.

“From the more than 130 inquiries we received a total of nine formal offers, which was hugely significant for a property of this type and sale of this size.”

Mr Bond said investors were drawn to the solid tenant covenants, including the Queensland Government, Honeywell and NBN, as well as the appeal of the Cannon Hill precinct and surrounding amenity.

“Cannon Hill continues to attract investor interest due to the quality of office developments, accessibility to public transport, excellent carparking and low vacancy rate,” he said.

Savills’ Peter Chapple and Knight Frank’s Matt Barker outside 19 Corporate Drive, Cannon Hill, within Southgate Corporate Park. Picture: Richard Waugh

Mr Chapple said investors also recognised there was significant underlying demand for users of business park assets, including industrial and logistic users seeking a higher level of accommodation for their staff than traditionally offered in a warehouse asset.

“This recent trend is driving demand from a variety of active capital sources seeking to deploy funds into assets with positive underlying growth indicators,” he said.

Centuria’s head of real estate and funds management, Jason Huljich said the gross sale price achieved was approximately $5.1 million or 17 per cent in excess of the property’s December 2018 valuation.

“Having purchased the asset in December 2012 for $23.3 million, income returns from the Centuria 19 Corporate Drive Fund have been excellent — on average 10.27 per cent per annum — and investors can expect a total return of around 109 per cent,” he said.