Singapore’s Ascendas REIT swoops in $106m office sling in Fortitude Valley

A SIX-storey inner-city building has fetched the highest per-square-metre price in Brisbane’s fringe office market for more than a year.

OFFICE DEAL: The fully-occupied building at 108 Wickham St, Fortitude Valley, acquired for $106.23 million by Singapore-listed Ascendas REIT.

SINGAPORE-listed Ascendas REIT has swooped on a second office asset in Brisbane’s Fortiude Valley.

It has snapped up the fully-occupied, six-storey building at 108 Wickham St for $106.23 million on an initial yield of 6.5 per cent.

The sale price reflects $8917/sq m of building area — the highest rate per square metre achieved in Brisbane’s fringe office market since the sale of Green Square South in late 2016.

The latest acquisition by Ascendas — Singapore’s largest listed business space and industrial real estate investment trust — comes just three months after it purchased a neighbouring building at 100 Wickham St for $83.83 million.

Both transactions were negotiated by CBRE, with the 108 Wickham St deal brokered by Flint Davidson, Tom Phipps, Bruce Baker and Adelaide O’Brien.

The prominently-positioned Wickham St asset comprises a net lettable area of 11,913sq m and includes parking for 142 cars.

It was listed for sale by Sydney-based fund manager Centennial Property Group and attracted strong interest from local and offshore groups.

“This transaction caps off a very active year for the Brisbane office market, with new investors and foreign capital attracted by the comparatively attractive yields that Brisbane offers relative to Sydney and Melbourne,” Mr Davidson said.

“The sale demonstrates that, despite a still relatively weak leasing market, there are still opportunities to successfully reposition assets.”

Ascendas non-executive director Manohar Khiatani said its focus was “on growing our portfolio in locations with long-term growth potential”.

“Our recent acquisitions reflect our confidence in the outlook of the Queensland economy and the demand for suburban office space in Brisbane,” he said.

“With this acquisition, the Australian portfolio will grow by 8 per cent to $1.6 billion.”

Ascendas has a diversified portfolio of 103 properties in Singapore and 29 in Australia spread across Sydney, Melbourne, Brisbane and Perth.

The 108 Wickham St office building has a weighted average lease expiry (WALE) of 6.4 years underpinned by key tenants including global engineering giant ARUP and the Queensland Government’s Department of Health.

The asset also has strong environmental credentials, with a 5.5 star NABERS Energy Rating.

“108 Wickham St is a strategic purchase for Ascendas REIT, offering synergies with 100 Wickham St and giving them control an entire 5771sq m city block,” Mr Phipps said.

“Ascendas is backing the future growth potential in the Fortitude Valley area having now committed $190 million to the precinct.”