The Charter Hall Prime Office Fund (CPOF) and John Holland have together acquired a new block of land in Newstead, Brisbane for $16.5 million in order to develop a new A-Grade office tower.
The Development Approval for the 14-level office tower includes ground floor retail, 188 basement car parking bays and end of trip facilities.
As a 3,254 sqm open site, this joint venture is located on the corner of Breakfast Creek Road and Skyring Terrace and secured as the last remaining office development site within Newstead’s established ‘Gasworks precinct’, a business and lifestyle community only 1.7 kilometres from the Brisbane CBD.
The tower will adjoin CPOF’s current 50% interest in 100 Skyring Terrace, home to Bank of Queensland.
The acquisition of this land is a strategic win for the joint venture duo, as Charter Hall Prime Office Fund Manager Craig Newman explained that Brisbane’s near city market has stabilised during 2016 recording an improvement in leasing activity with the A-Grade vacancy rate falling from 15.7% to 13.4%.
“The acquisition secures CPOF the last remaining office development site within the ‘Gasworks’ precinct and Fortitude Valley precinct.
“This part of Brisbane’s office market is proving to be resilient in attracting corporate occupiers who are seeking newer built environments,” he said,Jones Lang Lasalle National Director Sales & Investments (Queensland) Seb Turnbull managed the sale and believes the development is the last piece of the puzzle in what has been Brisbane's most successful mixed use private sector project.
“Over the last 10 years the Newstead and Fortitude Valley office markets have delivered more high quality office accommodation than any other near city market in Brisbane,” he said.
“Over 200,000m2 of A-grade space has been delivered into the market, with vacancy in these newer A-grade buildings being 1.5% in Newstead and 7.0% in Fortitude Valley.
“The combined vacancy rate for newer buildings in both markets is 5.3% - less than a third of the total Near City office market vacancy which sits at 17.3%."Construction is expected to commence in the first half of 2017 subject to securing the required tenancy pre-commitments.