Fortius, PGIM Spend $214m in Brisbane CBD

Sydney-based Fortius Funds Management has staked a $214-million claim in Brisbane’s Golden Triangle precinct as it seeks to capitalise on the “dislocated” office sector.

It has acquired the prominently positioned 25-level, A-grade office tower at 307 Queen Street in partnership with PGIM Real Estate on a passing yield of about 6 per cent.

The recently refurbished asset was offloaded by LaSalle Investment Management, which paid $142 million for the building in 2017.

It comprises a net lettable area of 19,617sq m and was sold 93 per cent occupied by an array of tenants including Heritage Bank and Bank of China.

Fortius chief executive Sam Sproats said the transaction represented an attractive opportunity to secure a high-quality, centrally-located office building while also being an integral part of the city's thriving CBD.

“As we continue to navigate the pandemic, there is an opportunity to capitalise on the dislocated office sector and find value,” he said.

“As workers return to the office and cities are revitalised we are seeing interest from domestic and international investors, who are looking for agile assets with strong market fundamentals, such as 307 Queen Street.

“Together with PGIM, 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.”

Prior to its sale, 307 Queen Street underwent a $5 million upgrade to its lobby and retail areas, and achieved 5 star NABERS energy and 5.5 star indoor environment ratings

PGIM Real Estate managing director Steve Bulloch said Brisbane’s CBD office market was an attractive proposition 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,” he said.

It was secured in an off-market deal after Knight Frank’s Justin Bond introduced Fortius Funds Management and PGIM to the vendor, LaSalle Investment Management.