Inner-city tower sells for $214m, as Mineral House prepares for student transformation

The Aware Super fund has entered the Brisbane office property market, with a $214 million purchase of a CBD tower to reach settlement before the end of the year.

Dexus confirmed to the Australian Stock Exchange on Thursday that contracts for the $213.9 million sale of 145 Ann Street had been signed, with settlement due next month.

“The property is an A grade office building located in the northern periphery of the Brisbane CBD with occupancy by area of 84 per cent and a [weighted average lease expiry] of 3.2 years,” Dexus told the ASX.

Aware Real Estate has bought 145 Ann Street, Brisbane, from Dexus for $213.9 millionCredit: Cameron Atfield

Aware Real Estate head of investment Pete Carstairs said the purchase of the 27-storey tower, next to the heritage-listed Ann Street Presbyterian Church and overlooking King George Square, was part of the company’s strategy of acquiring office buildings along the eastern seaboard.

“This asset has cleverly designed floorplates that capture expansive views, is close to public transport and offers tenants high-quality amenities,” he said.

“Expanding into the Brisbane office market will also provide [Aware] geographical exposure to a new, core eastern seaboard market that is currently showing growth due to market tailwinds.”

Carstairs said, compared to other Australian cities, the Brisbane office market performance was strong due to limited supply and declining vacancy rates.

“Our analysis has identified favourable drivers such as below average A grade market vacancy rates which lead to a forecast of significant rental growth over the next five years together with a strong state economic outlook,” he said.

Dexus still maintains a significant property portfolio in Brisbane – One Eagle Street (formerly Waterfront Place), 123 Albert Street, 480 Queen Street and the under-construction, $2.5 billion Waterfront Brisbane project.

In addition, Dexus announced last month that – along with Marquette Properties – it would repurpose the old Mineral House at 41 George Street into student accommodation.

The 27-storey tower, once the workspace for Queensland public servants, is just two blocks from Queensland University of Technology’s Gardens Point campus and Griffith University’s future campus at the old Treasury Casino.

The former Mineral House, at 41 George Street.

Marquette bought Mineral House in March for about $120 million, the Australian Financial Review reported, before entering into a partnership with Dexus to repurpose the site.

At completion, Dexus expected the 1200-bed facility to be valued at about $500 million.

“This transaction demonstrates our ability to leverage the broad set of capabilities across our platform to create value for clients and investors,” Dexus chief executive Ross Du Vernet said.

“This includes special situations investing, office development and refurbishment, and the infrastructure team’s deep understanding of the Australian student accommodation sector.”

In May, plans were submitted with Brisbane City Council to convert an office building at 150 Charlotte Street into student accommodation.

Almost a decade ago, Student One converted Boeing House, on the corner of Adelaide and Wharf streets, into student accommodation.

Last year, Brookfield and Citiplan lodged plans for a 31-storey student accommodation tower at 240 Margaret Street.

The Mineral House project was expected to be complete by 2026.