Towering $525m Brisbane CBD deal boosts recovery of Qld office market

In the city’s largest commercial office deal so far this year, Cromwell Property Group has exchanged contracts to buy Brisbane’s 400 George St tower for $524.75 million.

THE recovery of Queensland’s office market is officially in full swing with contracts being exchanged for the sale of Brisbane’s 400 George St.

In the city’s largest commercial office deal so far this year, Cromwell Property Group will pay $524.75 million for the 34-storey, A-grade building.

The listed property fund manager and investor is buying the 43,978sq m tower from US private equity and property giant Blackstone and German group HSBC Trinkaus in a deal expected to settle next month.

Its acquisition in the city’s prestigious North Quarter precinct comes as the improving Brisbane office market gains momentum amid declining vacancy and surging interest from investors.

400 George St, Brisbane.

The landmark CBD property was marketed by CBRE’s Bruce Baker and Flint Davidson and JLL’s Seb Turnbull and Luke Billiau.

It is one of a wave of deals that have been going through lengthy due diligence periods and are tipped to push office investment market sales to a near record end-of-year level.

Cromwell’s chief executive officer, Paul Weightman, said the purchase was in line with the group’s strategy of recycling capital into new opportunities and he added that it had “a number of other accretive opportunities in the pipeline”.

“We continue to look to recycle capital from assets where we have already added significant value, as we have done with Northpoint Tower in North Sydney, to ones where we see new opportunities such as 400 George Street,” he said.

The landmark Brisbane office tower has a 4.9-year WALE and 99.8 per cent occupancy rate underpinned by blue-chip corporate, legal, state and federal government tenants.

Designed by award-winning Cox Architecture, 400 George St was developed by Leighton Properties and Grosvenor Australia Investments.

Leighton offloaded its half-interest to Trinkaus in 2007 for $210 million and in 2013 Grosvenor sold its half-stake for $178 million to South Australia’s Motor Accident Commission (MAC). Blackstone subsequently acquired its half-interest in 2017 when it purchased the $500 million-plus MAC portfolio.

The asset also features a retail precinct across its ground floor and podium level as well as basement parking for 223 vehicles and end-of-trip facilities. It carries a 5-star Green Star rating from the Green Building Council of Australia and a 4.5-star NABERS Energy rating.