Australian property development group Kyko has swooped in on the newly refurbished A-grade office tower at 201 Charlotte Street for $126.7 million amid strong investor interest and low vacancy in Brisbane's CBD office sector.
The 16 level tower, with a net lettable area of 13,291sq m, recently underwent a $5 million refurbishment before vendors Fortius Funds Management and two BlackRock-managed private funds listed the asset in February.
Fortius and the two funds purchased the tower for $81.5 million in 2015.
The Charlotte Street tower is currently 87 per cent occupied, with the sale price reflecting a 5.94 per cent yield, and major tenants including Anglo American Metallurgical Coal.
CBRE’s Flint Davidson and Tom Phipps along with Knight Frank’s Justin Bond and Ben McGrath managed the expressions of interest campaign which attracted five bids from local groups and three international offers.
Brisbane’s strong underlying economic fundamentals had been one of the key draw cards for prospective purchasers, explains Phipps.
“With the largest decline in vacancy of any major Australian CBD in the past 12 months, Brisbane is experiencing a dynamic economic recovery aided by forecasts that growth in Queensland’s Gross State Product will outpace the rest of the nation at 3.4 per cent over the next five years,” he said.
“This, coupled with significant yield spreads to Sydney and Melbourne, is attracting buyers to Brisbane as a value proposition with genuine growth prospects.”
Davidson says he expects similar transactions in the second and third quarter.
Recent Brisbane CBD transactions include the $113.6 million sale of 288 Edward Street snapped up by Heitman with local fund manager Marquette Properties.
US property giant Lasalle snapped up 293 Queen Street for $52.25 million in December.
And Rockworth Capital Partners purchased a 17-storey office tower at 100 Edward Street, located within Brisbane's golden triangle, for $60 million in an off-market deal last August.