Office sales lead property earnings

Commercial property transactions are on track to top last year’s record annual total of $37.8bn.

313 Adelaide Street, Brisbane.

Commercial property transactions are on track to top last year’s record annual total of $37.8bn, as volumes are driven higher by ever-larger portfolio deals and a slew of big-ticket ­individual transactions.

Preliminary CBRE data shows commercial sales now total $37.2bn and several major deals are in the works.

CBRE Pacific head of capital markets Mark Coster said it was likely that 2019 sales would hit a new record despite a marked drop in the number of transactions, which are 30 per cent down on the five-year average.

“More than any other year, 2019 was typified by large trades across almost every asset class,” Mr Coster said, noting that the larger trades had been largely driven by mergers, private equity deals and structural changes for shopping centres.

Offices were the only sector to surpass previous levels, coming in at $23bn or the highest on record, compared with $17.8bn last year.

Retail sales volumes came in at $7.4bn, down 25 per cent on 2018, with the number of transactions down 37 per cent.

Office deals are still being struck right around the country.

In the latest play, local group Prime Super and Adviser Whitehelm Capital have swooped on an Adelaide Street, Brisbane tower for more than $150m.

The off-market deal, brokered by CBRE, will see the pair snap up 313 Adelaide Street from global funds giant DWS Group, which owned the tower for about four years.

Local and offshore funds are chasing Brisbane’s office market for the relatively high returns on offer, as pricing in Sydney and Melbourne soars. The Queensland capital in particular is benefiting from the resources market recovery but interest in offices has surged countrywide.

CBRE’s Tom Phipps, Bruce Baker and Flint Davidson negotiated the off-market Adelaide Street deal, and Matthew Lawrence of CBRE’s debt team ­arranged the debt ­facility.

Mr Phipps said the deal highlighted heightened onshore investor activity in Brisbane after the Queensland government ­decided to introduce a foreign land tax surcharge.