Suncorp Strikes Massive Leasing Deal as Mirvac Moves to Sell $418m Stake

After months of speculation, Suncorp has announced it will take close to 40,000sq m in Mirvac’s $800 million 80 Ann Street Brisbane CBD tower, marking the largest leasing deal in more than a decade.

In an ASX announcement on Monday, Mirvac said that it has entered into an agreement to sell 50 per cent of the tower to British fund manager M&G Property’s Asian property fund.

The deal, worth $418 million on a 5 per cent cap rate, will see M&G fund 50 per cent of the construction and development costs of the tower.

Now that a major tenant has been secured, Mirvac has exercised a put-and-call option with Singaporean developer Wee Hur for $79 million for the 5,500sq m site. Wee Hur had previously received a permit for a 36-storey student accommodation tower on the site.

The Suncorp lease was fiercely sought-after, with Mirvac beating out Charter Hall and Investa’s 360 Queen Street and ISPT’s Regent Tower for the lease.

Suncorp will take up 66 per cent of the tower – 39,600sq m – for a 10-year term and move into its new Brisbane location by September 2022.

Related: Suncorp Strikes Major Adelaide Leasing Deal

The 80 Ann Street tower will offer 72,540sq m of office space with 1,500sq m floorplates; Mirvac lodged an development application for the Woods Bagot-designed office tower in February.

The move will consolidate Suncorp’s Brisbane workforce into a single office space, following on from similar office consolidation projects the bank has carried out in Sydney, Auckland and Melbourne.

“It will provide the flexibility we require for our future workforce and is an opportunity to bring our teams in Brisbane together into one location," Suncorp chief executive Michael Cameron said.

Mirvac chief executive Susan Lloyd-Hurwitz said the company had worked closely with Suncorp and architecture firm Woods Bagot on the deal for a number of months.

“We have been able to provide Suncorp with a superior, bespoke workplace solution that meets all of their strategic objectives, and allows for flexibility into the future.”

The $800 million, 32-storey development has been described as a “city within a building”, spanning an entire block between Ann and Turbot streets.

“The design returns the last remaining piece of Brisbane’s oldest surviving fruit and produce market on Turbot Street back into the city fabric, and – with its overwhelmingly public and porous ground floors – will act as a catalyst to the upcoming Brisbane Live precinct and the development of the north-west quarter of the CBD around the Roma Street Station,” Woods Bagot director Mark Damant said.

The 80 Ann Street development will provide 6 Star Green Star, 5 Star NABERS Energy and Gold Shell and Core WELL ratings.

Subject to Mirvac finalising the land acquisition from Wee Hur, Suncorp will move into its new, consolidated digs by September 2022.