US giant PGIM joins Fortius in $214m Brisbane tower buy

Heavyweight global property investor PGIM is backing a recovery in Brisbane’s office market, joining local Fortius in a $214m tower buy in the city’s CBD.

Fortius and PGIM have bought 307 Queen Street, in Brisbane’s coveted ‘Golden Triangle’.

A heavyweight global property investor is backing a recovery in Brisbane’s office market, with US giant PGIM Real Estate joining local investment house Fortius to pay $214.48m to buy a building in the heart of the CBD.

The pair teamed up to buy 307 Queen Street from international group LaSalle Investment Management, which added value to the asset during its ownership.

Brisbane is on the radar of large investors seeking to access a growth play in the Asia-Pacific and PGIM Real Estate head of Australia Steve Bulloch said its CBD office market was attractive due to the city’s future economic and demand forecasts, continued infrastructure spend, and increasing offshore investor interest.

“The 307 Queen Street asset is well-located, has significant amenity and sustainability characteristics and strong appeal to smaller and medium-sized tenants. PGIM is pleased to co-invest with Fortius in this attractive off-market transaction,” he said.

The 19,617sq m complex is one of the best in the city’s coveted “Golden Triangle”.

Fortius chief executive Sam Sproats said the transaction represented an attractive opportunity to acquire a high quality, centrally located office building which was an integral part of the city‘s thriving CBD.

“As workers return to the office and cities are revitalised we are seeing interest from domestic and international investors who are looking for agile assets with strong market fundamentals, such as 307 Queen Street,” he said.

The purchase also shows an uplift from the $142m that LaSalle picked up the tower for in 2017. The firm’s head of asset management Simon Howard said the complex held broad appeal and modern amenities “The quality repositioning undertaken in recent years combined with its premier location ensured that 307 Queen became a highly sought after asset in the market,” he said.

The deal was brokered by Knight Frank’s Justin Bond, who cited the strength in the city market. The Queen Street tower was a quality asset offering genuine investment fundamentals, and responded extremely well during the pandemic, with ongoing tenant demand, he said.

“The strong cashflow, occupancy and prime location were the most appealing attributes of the investment for the buyer,” he said. Mr Bond said demand for Brisbane CBD investments continued to build despite the pandemic, with numerous investors trying to purchase this asset over the last 18 months.