Demand for commercial space in the new Maroochydore CBD is building momentum with more than 40 per cent of a new sustainable office building already leased.
Construction work is expected to start this month on Evans Long’s eight-level Foundation Place building on South Sea Islander Way, with a number of tenants already secured including a law firm, investment company and town planner.
Evans Long has also revealed it will take space in the building which is set to have strong green credentials with a signed agreement to be the first private commercial building on the Sunshine Coast to achieve a 5 star energy rating under the National Australian Built Environment Rating System (NABERS).
Evans Long partner, Matt Evans, said the energy efficiency of the $30 million building appealed to prospective tenants.
“It will include the Sunshine Coast’s first green wall, solar panels, energy-efficient lighting and low VOC (Volatile Organic Compound) materials,” he said.
“It will also take advantage of Australia’s first underground automated waste collection system and harvest rainwater for grey water use in toilets and gardens.”
Evans said modern businesses considered eco-friendly features “must haves” to attract and retain the right staff but also to reduce their footprint in the region.
SunCentral Maroochydore chief executive officer John Knaggs said the Evans Long building would be a landmark in the 53-hectare city centre.
“The new CBD has been designed as a modern, high tech, clean and green environment which our research shows is the type of environment that growing businesses want,” he said.
Evans said the commercial space would set a new benchmark for commercial space on the Sunshine Coast.
“We are targeting forward-thinking business operators looking for modern facilities, convenience and who want to be amongst the first tenants in the new CBD which will be one of the most digitally advanced city centres in the country,” he said.
“We have had strong interest from a range of potential tenants who want to be part of the new, vibrant CBD.”
Foundation Place has 5006sq m of floor space, including ground floor retail, five levels of office space and two podium levels of car parking.
SunCentral Maroochydore commercial property consultant Jerry O’Reilly said the new city centre was meeting a growing demand for contemporary urban design and infrastructure as well as state-of-the art digital technology.
He said the new international subsea cable, which would be operational in 2020 and would land at the eastern edge of the new CBD on Maud Street, would provide business with Australia’s fastest data connection to Asia from the east coast.
“Businesses that are looking to expand their own operations are identifying the growth opportunities taking place on the Sunshine Coast,” he said.
O’Reilly said he was negotiating with a wide array of companies including the finance, legal, hospitality, medical, education, technology and residential sectors, many of which relied on efficient, reliable and fast connectivity.
Investec Lists Fortitude Valley Office Tower
The newly-listed Investec Australia Property Fund will divest its 11-storey Fortitude Valley office building with an expected price north of $90 million as it moves to recycle capital.
Fresh off the heels of its fully underwritten institutional placement and purchase of three industrial properties in the Northern Territory, Western Australia and South Australia for $84 million last month, Investec has motioned to sell its Brisbane, 757 Ann Street, tower.
Investec purchasted the Nettleton Tribe-designed tower for 68.5 million after it was completed in 2014.
Comprising 9,422sq m of office space with a weighted average lease expiry of approximately five years, the A-grade building, anchored by technology company Asea Brown Boveri, is 100 per cent leased.
Cushman & Wakefield’s Mike Walsh and Peter Court are managing the international expression of interest campaign, to kick off mid-October, with expectations it will generate strong interest from domestic and off-shore institutions, funds and syndication groups.
“The entire commercial component of the asset is structured on a net lease basis, providing smooth, predictable cash flow for investors,” Court said.
Sales over the first half of the year surpassed the total volume of sales over 2018—reaching $1.2 billion, according to Colliers research, with Australian institutional investors dominating the lion share of transactions.
Commercial assets currently on the market include Perth-based investor RG Property’s 410 Queen Street in Brisbane’s ‘golden triangle’.
Recent Brisbane assets changing hands include the sale of the Jubilee Place Office development at nearby 470 St Pauls Terrace to a real estate fund managed by Credit Suisse, Malaysian-backed HCK’s 116 Adelaide street for $30 million, and QIC’s Q&A Centre at 141 Queen Street and 140 Elizabeth Street which sold to Taiwanese developer Shayher Group.
As for development plans in the Fortitude Valley precinct, Sydney fund manager Millinium Capital in August announced plans for a new university campus and 30-storey tower that would comprise student accomodation, co-living and co-working space at 240 Brunswick Street and 11 Overells Lane.
Hines Makes $40m Windfall on Brisbane Office Asset
Institutional appetite in Brisbane’s fast-trading office market looks set to continue, with property fund manager Centuria the latest group to enter the fray.
And there’s money to be made—with the vendor of Centuria’s latest acquisition, US property investor Hines, making a cool $40 million on the 11,484sq m office asset in less than two years.
Centuria acquired the IBM-anchored 348 Edward Street asset for $89 million on an initial yield of around 6.5 per cent.
Hines picked up the 15-storey office tower from Brisbane property identity Peter Harburg in late 2016 for $49 million.
Nearby, Sydney investor Fife Capital has picked up the heritage-listed Metro Arts building at 109 Edward Street for $11 million, with the not-for-profit Metro Arts relocating to West End.
Other assets that have recently changed hands in the Brisbane office market include QIC’s Q&A Centre—selling to Taiwanese developer Shayher Group—201 Charlotte, which was picked up by Kyko Group for around $126 million, and 116 Adelaide Street, which was sold by a Malaysian investor for $30 million.
Commercial assets currently on the market include RG Property’s 410 Queen Street and Lendlease’s 66 Eagle Street.
Centuria’s newest buy, the 15-storey 348 Edward Street tower, has a 5.1 year WALE and is 89 per cent occupied.
CBRE’s Flint Davidson, Tom Phipps and Adelaide O’Brien along with JLL’s Seb Turnbull and Luke Billiau handled the sale.
Joint Centuria chief executive Jason Huljich said that the transaction grows the group’s assets under management to $6.6 billion.
“Additionally, Centuria’s listed office REIT, CMA, has recently committed to acquire two A-grade office assets for $380 million and completed a $206 million institutional placement [supporting] these purchases.
“Centuria’s listed industrial REIT, CIP, has also settled four acquisitions for a total consideration of around $80 million since June.”
The property fund manager has been on a capital raising spree of late, flagging plans to diversify into the healthcare sector with a $500 million mandate from European giants AXA Investment Managers and Grosvenor Group.
HCK Sells 116 Adelaide Street Office Tower at Loss
Malaysian-based HCK has taken a hit exiting the Brisbane market after selling its second office asset this year for around $30 million in Brisbane’s CBD.
The sell-down comes at a loss having picked up the 116 Adelaide Street office property for $34.5 million in April 2013.
The 16 level building has 6,869sq m NLA and includes ground level, 15 upper levels of office space and a three-level basement. HCK recently carried out a refurbishment to the building’s amenities, foyer and office tenancies.
Colliers International’s Sam Biggins and Tony Wang managed the sale, which received seven offers, three of which the pair said were from offshore groups and local groups with offshore capital behind them.
Biggins said the property was previously marketed last year, “via another agent and failed to sell”, Biggins said.
“The end buyer was an Australian-based investor who was attracted to the value-add prospects of the asset such as the core CBD location, opportunity for further asset enhancement initiatives, and the ability to reposition the asset for lease within the rising B grade market,” Biggins said of the sale.
HCK’s divestment follows the off-market sale of 26 Wharf Street, a 12-story office building also in Brisbane CBD it had picked up in 2012. Brisbane investor Renweed Pty Ltd paid HCK $9.8 million for the property in April this year.
Taiwanese-backed developer Shayher Group is reportedly set to exchange contracts for QIC’s Q&A Centre, the 24-story 141 Queen Street and 10-storey 140 Elizabeth Street, in Brisbane’s CBD.
Fresh from buying up the 20-hectare Bulimba Barracks site in August, the Taiwanese-backed developer paid around $390 million for the two-tower Brisbane CBD asset.
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