In its second major office acquisition in less than a year, Quintessential has nabbed the A-Grade office tower at 240 Queen Street in Brisbane’s “Golden Triangle” from Brookfield.
The $250-million deal has settled after the real estate fund spent $293.1 million on 1 Margaret Street in Sydney late last year.
The asset comprises 24,922sq m of office space and 2710sq m of retail space in what is shaping up to be one of Australia’s most resilient office markets, where prime face rental growth was recorded at 11.4 per cent last year.
Brisbane is anticipated to remain the highest-growth market in Asia Pacific in the medium term, according to JLL, and Quintessential chief investment officer Andrew Borger agrees the time is right for the Brisbane market.
“Recent focus on Southeast Queensland, in particular premium-grade commercial assets, has created a strong sense of competition in the market,” Borger said.
“Over the next 12 to 24 months, the arrival of two of the largest pieces of public infrastructure in over 100 years will reshape the Brisbane CBD.
“The Cross River Rail station at Albert Street and the new Metro on King George Square will be less than 400m from 240 Queen Street and reorientate the city’s centre to a more central location.
“Since 2022, Brisbane CBD has witnessed the highest net absorption of any CBD in Australia, which is driving not only demand for office space but also fuelling flight-to-quality and competition for premium-grade spaces.”
JLL’s Paul Noonan said the transaction was the biggest in the Brisbane office market in the current cycle.
“This further cements our market as a keen focus for growth-focused investors,” Noonan said.
“The asset’s timeless presentation and prime location will ensure its continued relevance in our market.”
Building on the $38-million upgrades and regeneration works by Brookfield, Quintessential will invest an additional $31 million in upgrades.
This would include a major upgrade of the entrance and lobby area, boosting the building's already-established sustainability attributes.
The tower is 97 per cent tenanted with Commonwealth Bank’s flagship branch at the ground floor with other tenants including Hall Chadwick Accountants, ASIC and Hall and Wilcox.
Head of Quintessential Invest Avi Gordon raised $137 million in wholesale capital from private investors for this acquisition, which Quintessential said was the largest capital raise of this kind in 2024.
“The success of this capital raise underscores the compelling investment opportunity presented by 240 Queen Street and reaffirms the Quintessential strategy of identifying and capitalising on counter-cyclical market opportunities,” Gordon said.
A recent Colliers report on Brisbane’s office market indicated Australia’s third most populous city needs about 11 more buildings the size of 1 William St—the 44-storey home of the Queensland government—by 2032 to accommodate the city’s population boom.
