Charter Hall Buys Brisbane No 1 Skyscraper Site for $94m

Active property fund manager Charter Hall has acquired the high-profile development site for No. 1 Brisbane, a proposed 81-storey skyscraper on Brisbane’s Queen Street Mall that won approval in 2017.

The Blackstone-owned 151 Property Core Plus Management fund listed the site in February. The parcel comprises three office buildings with a total lettable area of 10,183sq m and three separate frontages to the Queen Street Mall, George Street and Burnett Lane.

The purchase price of $93.96 million represents a core cap rate of 7.45 per cent and a fully-let passing yield of 7.9 per cent.

Charter Hall has been dominant in Brisbane’s office market this year – on Monday, two of its funds picked up Ariande’s 40 Tank Street building for $93 million and, along with Investa, Charter Hall won approval for a $650 million office tower on Queen Street last month.

The fund manager has also secured QSuper for nearly 18,000sq m at its Brisbane Square Tower and acquired the landmark Suncorp Plaza tower in Albert Street.

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Charter Hall managing director David Harrison said that the acquisition will be used as a seed asset for a new investment strategy.

“This is a rare opportunity to acquire three prime retail/office buildings, at close to office values per square metre, that have created a fantastic amalgamated future redevelopment opportunity which can be held over the medium term in a CBD undergoing significant infrastructure improvements.”

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Harrison suggested that the group may not move ahead with the approved plans for what would be Brisbane’s tallest tower, saying that the group will consider redevelopment longer term “while we actively manage and lease up vacancies”.

“Eventually our vision would see a new development like the successful 333 George Street project in Sydney CBD opposite Martin Place completed.”

Charter Hall’s 15-storey 333 George Street development, designed by Grimshaw with Crone architects, would deliver a much more modest outcome for the site than the approved 81-storey skyscraper.

The $250 million George Street project in Sydney secured WeWork as its anchor tenant – the co-working giant took a third of the entire lease – and was recently awarded commendations in the commercial architecture category and the City of Sydney Lord Mayor’s prize category at the 2018 NSW Architecture Awards.