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Investors achieving sharp yields for Brisbane metro assets

Shortage of available commercial investments with solid income potential and value-add development upside in Brisbane is creating strong competition amongst investors with a recent $7.5m sale of Logan Court in Upper Mount Gravatt achieving a record 2.73% yield.

The two level 2,484sqm commercial building at 2092 Logan Road was purchased by DPA Property Group Pty Ltd who is also the adjoining property owner. Hunter Higgins and Philip O’Dwyer of Colliers International marketed the property via an Expression of Interest campaign which generated 7 offers from local and interstate investors.

“At the close of the EOI we shortlisted three parties, with DPA Property Group being the strongest contender with a cash unconditional contract settling within a month,” said Mr Higgins. “They know the area well and could see the future potential of the asset adjoining their existing property and being across from the Westfield Garden City and within Principal Centre zoning with development potential of up to 15 storeys (STCA). 

“We understand their intention is to refurbish the release the asset. The weighted average lease expiry (WALE) is currently under 1-year across 12 tenancies. They will work through the tenancies over time as they vacate or renegotiate leases and fitout plans with the existing tenants who wish to remain. Current net income is $205,000pa with a potential fully leased income being $630,000pa,” said Mr Higgins.

Mr O’Dwyer said the market is the most buoyant they have seen in a long time. “On-market assets with passing income and value-add potential are very limited, and there is a good depth of purchasers considering the low interest rates. This is resulting in strong sales rates, sharpening yields and decreasing settlement time.  

“Highly competitive investors are paying a premium for these type of income producing value-add assets, so now is the time for owners who are considering selling, to be taking advantage of the strong market conditions and taking their properties to market,” said Mr O’Dwyer.

Mr Higgins said the Brisbane market is attractive to investors as it is on the cusp of a significant growth phase with Brisbane LGA annual population growth outperforming Australia and Queensland overall over the last 5 years. As well as the City going through its biggest ever infrastructure boom of over $45 billion in projects currently underway. 

“The Brisbane metro office market is the third most improved market throughout Australia with vacancy tightening nearly 2 percentage points. Net demand reached an eight-year high of circa 32,630sqm in the first half of 2019. Gross rents have been increasing gradually, incentives are starting to decline and yields across all sectors have tightened.

As a result of the strong market fundamentals and the sales activity we have grown our Brisbane City & Metro Investment Sales team recently by recruiting a major expert in the market, Tom O’Driscoll in the role of Director, who will be commencing work with us from 2nd December. We now have experts specialising in strata investments, Asian markets, premium investments, as well as restructuring and insolvency property services,” said Mr Hunter.

Logan Court is positioned on a 3,976sqm land holding in the heart of Upper Mount Gravatt, with prominent 32m frontage to Logan Road and approximately 60,000 car passing daily. The property also offers onsite car parking with 77 allocated bays. 

Related Experts

Hunter Higgins

Director | Brisbane City & Metro Sales

Investment Services

Brisbane CBD

Hunter Higgins joined Colliers International in 2010 and has been leading the Brisbane Investment Services team for the last 5 years.  

Hunter and the team offer their clients a tailored service by specialising in sales across the following investment property categories: office and retail, mixed-use development sites, office and retail strata property, Asia markets, premium investments and Restructuring Property Services.

With over 15 years’ experience in the real estate industry, Hunter has an exceptional track record and proven success as a market leader. He specialises in the Brisbane CBD and Metro markets with a focus on office and retail investments, and mixed-use development sites.

When it comes to customer service, Hunter invests in relationships to deliver enduring value, and offers enterprising solutions to achieve the best outcome for his clients. He retains long standing client relationships by continually exceeding their expectations through his strong market knowledge, active buyer relationships, solid work ethic, campaign management skills, honest feedback, clear direction and determination to achieve the best possible result.

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Philip ODwyer

Associate Director, Brisbane Metro Sales | Investment Services

Investment Services

Brisbane CBD

Philip O’Dwyer’s property experience has broad experience on both sides of a major property transaction. His strong history in property development and project management and his deep understanding of the economic and organisational dynamics that drive successful projects ideally position him to advise his clients and to ultimately achieve transactions that maximise their outcomes. Philip worked in senior leadership positions on large urban property projects and detached housing built form and broad acre land subdivision projects with Watpac and Investa-owned Clarendon Homes. He also worked within CRI Australia and Buranda Properties. Philip has worked in all of the major property sectors and has achieved very well across all projects. His high-level property analytical skills are outstanding and have been developed through formal education and practical application.

He readily shares his detailed knowledge, allowing his clients to make informed investment and development decisions. Philip is known for his professionalism, negotiation skills and ability to communicate with clarity.

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