The commercial portfolio located within Brisbane’s tallest building, Brisbane Skytower, has just sold and settled for $32.9 million following a highly competitive international expressions of interest campaign conducted by Colliers.
The transaction marks the biggest settled volumetric transaction in Brisbane.
The prime asset, owned by property group Billbergia, comprises ten tenancies across four asset classes including the commercial carpark, drew 119 inquiries over the five-week campaign, 11 inspections and seven offers.
Anchored by commercial parking, Arise Hotels and Apartments, and national operator Kids Club Early Childhood Learning Centres, the portfolio comprises nine separate tenancies offering exposure to the commercial/health, childcare, retail and commercial car park sectors. The property was presented to the market fully leased with an 11+ year WALE offered for sale in individual lots or in one line.
The buyer, a high-net-worth Asian investor from Sydney, was among seven parties who submitted formal offers for the portfolio with the competitive process requiring three rounds before the buyer was selected.
The campaign, conducted by Tom O’Driscoll, Nick Wedge and Tony Wang of the Colliers Brisbane Investment Services team, attracted interest from a number of property syndicates and institutional funds, notably from interstate, as well as high net worth investors.
“The level of inquiry we received from this campaign was incredibly strong, leading to seven quality offers across all buyer profiles be it HNW Investors, syndicators and institutional capital,” said Mr O’Driscoll.
There is a growing trend for vendors alike to test their portfolio of asset’s for sale in a line or individually because of growing demand to acquire in Brisbane, particularly from interstate capital. Favourable market conditions coinciding with the recent announcement of the 2032 Olympics is the catalyst for this movement. Further, the yield spread between Sydney and Melbourne’s markets to that of Brisbane, identifies there will be continued growth in capital value and return for investors.
“There is strong demand from Asian investors both onshore and offshore for quality positioned commercial assets in the CBD due to the low interest rate environment and Brisbane being chosen as the 2032 Summer Olympics hosting city,” said Tony Wang, Colliers Asia Markets.
“The Brisbane Skytower commercial portfolio is a premium asset, and this is the first time a holding of this kind has been offered in the CBD,” said Nick Wedge. “The diversity and calibre of the tenants, and the property’s strong cashflow, affirms its appeal as a gilt-edged commercial investment.”
The Brisbane Skytower commercial portfolio has a net lettable area of 3,574sqm with over $1.8 million net income per annum plus GST with 78 car parks.
The property has been sold on an 11.27-year blended WALE (weighted average lease expiry) with a staggered lease expiry profile providing a consistent and de-risked cashflow.
The $32.846 million sale price represents an approximate 5.50 per cent capitalisation rate with the purchase price struck at $9,190 per square metre.
Brisbane Skytower, developed by Billbergia and AMP Capital, was completed in 2019 and heralded a number of firsts for the city.
The mixed-use tower, located at 222 Margaret Street, stands 88-storeys high and was the first building to reach Brisbane’s 274-metre height limit.
Comprising a total of 1,138 apartments, including serviced self-contained residential suites, Brisbane Skytower is home to Queensland’s highest penthouses and has the highest infinity swimming pool in the southern hemisphere.
The multi-award-winning development caters for more than 3,000 short-term and long-term residents.
Billbergia Group Managing Director, John Kinsella AM said: “Brisbane Skytower is prime real estate within the city precinct. For several years post the 2009 financial crisis, the site was nothing more than a 23-metre-deep hole and accommodated flooding waters from Brisbane River and neighbouring properties. We could see the long-term potential for a quality mixed-use development and, although the size and scale of the project was daunting, subsequent years saw local construction company Hutchinson Builders pragmatically progress through construction. The result is a quality, popular, mixed-use development that offers unique commercial/ retail suites and skyrise apartments to a variety of investment or lifestyle interests.”
The sale of Brisbane Skytower’s commercial portfolio settled on Tuesday October 19th.