Toowong’s top class revival gets the tick from developers and investors
Brisbane’s inner-west hub of Toowong is buzzing with development and investment activity again and here’s why.
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IT has always been in a class of its own in Brisbane’s inner-west but Toowong is booming again on the back of the city’s influx of international students.
The suburb’s proximity to the University of Queensland’s St Lucia campus has led to a rapidly rising student population in the area.
Developers have renewed their focus on the tightly-held precinct and are ramping up residential projects, driving increased interest from investors to capitalise on the growth.
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New retail and food operators also have been moving into the area to service the expanding student population.
A Hong Kong-based investment group has recently staked its claim in the hub with the $23.5 million purchase of the 11-storey Sherwood House office tower at 39 Sherwood Rd.
The sale follows a number of other transactions in the area, including a 1.3ha site, which is earmarked for a $300 million mixed use development inspired by The Grove shopping centre in Los Angeles.
Sherwood House comprises a net lettable area of 5211sq m and features a diverse tenant mix with medical and corporate office users as well as ground floor retail and food operators.
It was sold almost 85 per cent occupied with potential future rental upside.
Lioncorp Commercial’s Joseph Miu, who brokered the deal in conjunction with building manager Pace Property, said the sale price reflected a net yield of about 7.2 per cent.
Mr Miu said the expressions of interest campaign attracted strong interest from both local and Asian-based investment groups.
He said the buyer moved quickly to secure the asset.
“This buyer was very keen and the deal was done within two weeks of the marketing campaign commencing,” Mr Miu said.
“They were very happy with the asset, particularly its location and potential for long-hold upside with surrounding development and high corporate office uptake at higher rental.
“Toowong is a high growth precinct with an established and rapidly growing student market close to the University of Queensland.
“But proximity to healthcare, transportation networks and retail amenity also were big drivers for this buyer in determining the right location for investment.”
Mr Miu added that the investment return of 7.2 per cent was “well above” what the buyer could have achieved in the Asian market.
He said the recent refurbishment of the nearby Toowong Village shopping centre also had bolstered the area’s investor appeal.
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