Dexus’ Waterfront Brisbane project costs blows out $200m to $2.5bn as construction costs rise

The developer behind a city-shaping development in the Brisbane CBD says costs have blowout by $200m to $2.5bn as construction pricing bites.

The forecast cost of a major Brisbane CBD city-shaping development has blown out by millions before demolition work has started on the project.

In its annual results presentation developer Dexus said that the forecast cost of its huge Waterfront Brisbane development at Eagle St had increased to $2.5bn – a $200m rise over the past six months.

Originally a $2.1bn project, in a February market update this year, Dexus put a dollar figure of $2.3bn, and pushed the start of construction into 2022-23.

“The project cost is an estimate and is for the two towers,” a Dexus spokeswoman said.

“It reflects an updated view on construction pricing and refinements to the scheme and areas.”

Approved by Brisbane City Council in 2020 the project includes a 49 and 43 storey towers with a combined 120,000sq m of office space. The project, which will require the demolition of Eagle Street Pier, will also have a retail component, large public plazas opening on to the river and a widening of the riverwalk to at least 6m for the full length of the site.

An artist's impression of Dexus' $2.5bn Waterfront Brisbane project.

However, complicating matters is the high-stake legal battle being waged between Dexus and Bloomberg Corp’s Riverside Development, which owns the mixed-use Riparian Plaza tower next to Eagle Street Pier.

Riverside Development is taking both the Brisbane City Council and Dexus to court over the project claiming it will negatively impact the amenity of Riparian Tower.

Riparian, which includes apartments owned by some of the city’s wealthiest residents including Sarina Russo, is the only property adjoining or in the vicinity of the redevelopment site not controlled by Dexus.

Opponents claim the first new tower will be only 14m away from Riparian Plaza when council regulations say it should be at least 18m. A judgment in the case is expected later this year.

Despite the legal issues Dexus secured its third precommitment for its North Tower at Waterfront Brisbane, the first of the two office towers.

Lawyers Gadens has committed to 4500sq m across three levels and joins Deloitte and MinterEllison bringing precommitments to 35 per cent of the office space in the North Tower.

A plan submitted to the council last month shows the Riverwalk, between Riparian Plaza and the Stanford Hotel, would be off limits to pedestrians and cyclists for 2½ years during construction.

Originally published as Dexus’ Waterfront Brisbane project costs blows out $200m to $2.5bn as construction costs rise