Nippon Telegraph & Telephone Corporation takes control of Brisbane tower

The Japanese telecommunications giant is among the leading the way in office investing this year with more offshore capital tipped to follow.

The entrance to the tower at 53 Albert Street, Brisbane. Picture: Annette Dew

Japanese telecommunications giant Nippon Telegraph & Telephone Corporation is taking full control of a Brisbane office tower by buying out co-owner JPMorgan Asset Management for about $110m.

NTT Corporation will exercise its rights to acquire a 50 per cent stake in the tower at 53 Albert Street that was quietly offered for sale last year.

The off-market campaign was handled by Peter Chapple and Bruce Baker of CBRE and attracted interest from local and offshore players before NTT Corporation exercised its rights to buy the ­interest. The parties and agents declined to comment.

The price being paid by the Japanese company is a discount to the sum of about $142.5m it paid in late 2022 when it bought its first half interest in the tower from JPMorgan. The latest acquisition shows a yield in the mid-8 per cent range.

Local firm Realmont Property Partners advised the Japanese company on both transactions, but has declined to comment. The existing partial interest in the tower is already managed by Realmont, alongside the JPMorgan entity.

Realmont has advised NTT Corporation on growing its portfolio of Australian commercial real estate investments in major capital city markets along the eastern seaboard.

The tower at 53 Albert Street in Brisbane, now owned fully by NTT Corporation.

The Albert Street tower is a modern A-grade office building on a prominent corner in the CBD’s administrative precinct. The building was completed in 2009 and has 13 levels of offices above ground, eight levels of ­podium car parking, and four ground floor retail tenancies.

The offices are fully leased by the Queensland government until 2028, while the car park is anchored by a lease to First Parking until 2030.

The property is one of few in the city to carry a 5.5 Star NABERS Energy rating. It is close to 1 William Street and Parliament House, and enjoys immediate proximity to substantial infrastructure projects, including the Albert Street Cross River Rail Station, Queen’s Wharf Precinct and surrounding new developments.

The complex is expected to benefit from Brisbane’s office market strengthening over the medium to long term as improved net migration, white collar employment growth and limited new supply support a market recovery.

The drop in value reflects the dramatic jump in interest rates over the period, which lifted the cost of capital and the capitalisation rates that determine property values.

But Brisbane remains an attractive market for investors, particularly the purchaser, which already held an exposure to the tower and wanted to increase it at below its entry price.

NTT set up in Australian property in 2011 and runs a housing ­development business in Melbourne. It shifted into office ownership with the purchase of a block in Canberra in 2019, and also acquired a building in Melbourne.

The Brisbane deal could spark further activity in the CBD with buyers active as they favour the opportunities over Sydney and Melbourne.