Dexus calls time on Hermes site with $82m sale

The developer has offloaded a Brisbane CBD property to a luxury tenant as it focuses on Waterfront Brisbane.

171 Edward Street was set to become one of Brisbane's tallest buildings under a previous owner, Aria. Picture: Supplied

Property giant Dexus has sold a site in Brisbane’s Golden Triangle that was billed as having the capacity for the city’s next skyscraper to one of its tenants, Singapore-listed specialist watch retailer The Hour Glass Group.

The watch retailer, which paid $82.2m for the property, has been an active buyer of luxury retail assets, spending about $100m on premium Melbourne properties in recent years and already holding Sydney properties.

Dexus had picked up the site, which has approval for a 274 metre skyscraper, in 2019, for $87m. It was reported to have approached its Catholic Church neighbour about a potential joint venture.

It had bought the property at 171 Edward Street, from residential developer Aria Property Group, controlled by Queensland developer Tim Forrester.

That firm had won approval for an 81-storey residential tower with retail and 642 apartments about six years ago, and Dexus had been expected to put forward an office scheme. But it is instead focused on the forthcoming $2.1bn transformation of Eagle Street Pier and neighbouring Waterfront Place into a premium business and leisure destination.

July 25 will officially mark the end of an era for Brisbane, with the city’s Eagle Street Pier precinct set to close for good after more than 30 years as Dexus pushes ahead with the prime precinct. It has already sold Brisbane landmarks including the Blue Tower and the Gold Tower.

Knight Frank’s Justin Bond is understood to have brokered the latest deal which showed about a 10 per cent premium to book value.

The property comprises two multi-tenanted retail buildings which are best known for housing luxury retailer Hermes. The buildings on the corner of Edward Street and Elizabeth Street were built in 1949 but have undergone a refurbishment with additional retail space being added via a laneway off Elizabeth Street.

The Hour Glass Group operates across 12 key cities in the Asia Pacific region and last month said that revenue crossed the $1bn mark for the full year to the end of March. It has benefited from higher customer demand for mechanical watches over the past few years and said that during the Covid-19 pandemic, interest in watches had reached new sets of younger, highly discerning watch enthusiasts and buyers.

“The Hour Glass’ performance was boosted by a significantly broadened fascination in high quality mechanical watches. The interest we are experiencing among local clientele in each of the cities we are present in have become more pronounced and we believe this is likely to continue,” The Hour Glass Group managing director Michael Tay said.

The Brisbane buildings occupy a site area of about 1,521sq m in the main luxury retail precinct in the heart of Brisbane’s central business district. They have a total net lettable area of 2,030sq m and The Hour Glass said the purchase was in line with the group’s strategy of owning properties at prime locations in selected cities.

The Hour Glass has bought in Melbourne. Last July, it acquired the Balenciaga flagship store in Collins Street, adding to its purchase in 2020 of another Collins Street building, tenanted by Louis Vuitton, for $68m.