Hines makes Brisbane tower swoop in $210m play

The Queensland capital is proving to be a drawcard for office investors on the hunt for a recovery.

More than $500 million worth of Brisbane towers are set to change hands this quarter. Picture: David Clark

Brisbane is again shaping up as one of the nation’s busiest office markets, with more than $500 million worth of towers set to change hands this quarter.

In one of the latest plays, Hines has swooped on the State Law Building at 50 Ann Street, and will pay Asian logistics giant ESR about $210 million for the building.

ESR is looking to sell the building after winning control of the $3.8 billion Milestone portfolio and it has also offloaded its stake in listed funds manager Centuria Capital as it focuses on building up its own warehousing operations.

Hines is a big believer in office buildings and in December last year swooped on a development site in the heart of Melbourne’s CBD, where it is planning a $1 billion-plus office scheme.

That site was bought from Chinese-backed developer Landream, which had planned a 54-storey luxury apartment and hotel tower on the blue-ribbon Collins Street site that was designed by the late Zaha Hadid.

In Brisbane, Propertylink and investment bank Goldman Sachs picked up the State Law Building from ­Malaysian investor CIMB Trust Capital for $145 million in 2017. ESR took Propertylink private in 2019 and first took the building to market last year after negotiating a new six-year lease with the department of justice.

JLL’s Paul Noonan and Seb Turnbull and CBRE’s Bruce Baker and Flint Davidson handled the sale, but declined to comment.

Hines is buying 50 Ann Street.

Brisbane has been active with local investment house Fortius paying about $210 million to buy a building in the heart of the city from international group LaSalle Investment Management.

Both large office investors and wealthy local players are back buying city blocks as staff return to their offices and a recovery is expected despite a tough period of higher vacancies and rising incentives to attract tenants.

Many buyers are property fund managers, including Cromwell, which has also bought in Brisbane, as investors chase higher yields than they get from banks.

Brisbane-based Marquette Properties also bought the Gold Tower in Eagle Street from a Dexus-managed fund for $285 million. Marquette at the time said the deal reflected its confidence in the outlook for Brisbane’s CBD.

For Hines, it could be a longer-term redevelopment play as it seeks to roll out its skills along the eastern seaboard, but for now it would be hoping the anchor state government tenant stays in place.

The Melbourne tower planned at 600 Collins will be one of five Hines projects in development across Asia and Australasia – including 36-52 Wellington, an 18,200sq m, 15-storey heavy timber creative office building in Melbourne and 9 Stewart Street, a 5000sq m, 10-storey boutique creative office also in Melbourne.