Long-serving specialist real estate investor, Fortius Funds Management, in partnership with PGIM Real Estate, has acquired 307 Queen Street in Brisbane CBD off-market for $214 million.
The A-grade office building holds a prominent position within the ‘Golden Triangle’ of Brisbane’s financial precinct. With 19,617 sqm of lettable space spanning over 25 levels, the high-quality asset is more than 93% occupied, having attracted and retained an array of tenants including Heritage Bank and Bank of China.
Fortius Chief Executive, Sam Sproats said the transaction represented an attractive opportunity to acquire a high quality, centrally located office building while also being an integral part of the city's thriving central business district.
“As we continue to navigate the pandemic, there is an opportunity to capitalise on the dislocated office sector and find value. As workers return to the office and cities are reviltaised we are seeing interest from domestic and international investors who are looking for agile assets with strong market fundamentals, such as 307 Queen Street,” Mr Sproats said.
“We are proud to be partnering with PGIM Real Estate and together we strongly believe that the office sector will remain an intrinsic part of workplace productivity, culture and performance – but the size and shape of these spaces needs to evolve.”
307 Queen Street recently underwent a $5 million upgrade to its lobby and retail areas, has a 5 Star NABERS energy rating and currently returns a 6% yield, which Fortius aims to boost to 6.5%.
Steve Bulloch, Managing Director and Head of Australia at PGIM Real Estate, said the Brisbane CBD office market is 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 Real Estate is pleased to co-invest with Fortius in this attractive off-market transaction,” he said.
Knight Frank Head of Capital Markets Queensland Justin Bond advised LaSalle Investment Management.
Mr Bond said 307 Queen Street was a quality asset offering genuine investment fundamentals, and had responded extremely well during the pandemic, with ongoing tenant demand.
“The strong cashflow, occupancy and prime location were the most appealing attributes of the investment for the buyer,” he said.
LaSalle’s Head of Asset Management Simon Howard said: “We believe 307 Queen Street is an outstanding example of a building that holds broad appeal to people and businesses alike given its commitment to modern and environmentally-focussed 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.”
Wholesale Investors can access 307 Queen Street through the Fortius Queen Street Trust, which is projected to return 8% p.a. over a five-year hold period.