The prominent IBM building in Brisbane has been sold for $49 million to interests associated with the US-based Hines Group.
CBRE’s Bruce Baker, Flint Davidson and Tom Phipps negotiated the sale of the 348 Edward Street tower on behalf of private Brisbane company Harburg Investments.
“Given the distinct lack of value-add opportunities recently in the Brisbane CBD, 348 Edward Street attracted significant interest from both domestic and offshore buyers chasing core-plus assets,” Mr Davidson said.
The deal with Hines Group was struck at an equivalent yield of 8.53%.
It is the latest Brisbane acquisition for Hines, who also controls two Fortitude Valley assets at 100 Brookes Street and 825 Ann Street.
The acquisition of 248 Edward Street delivers the group an A-Grade tower with a net lettable area of 11,484sqm.
There is potential to develop up to 50,000sqm of gross floor area on the 1,349sqm site, subject to the relevant planning approvals. This could encompass multiple uses, including residential, student accommodation, medical uses, a hotel or commercial office space.
“The existing building is situated on one of the highest sites in the Brisbane CBD, affording panoramic views over King Edward Park towards the Brisbane River,” Mr Davidson said.
“The location near Brisbane’s major retail and transport amenities was one of the key draw cards, with prospective purchasers focused on opportunities to either reposition the existing asset or redevelop the site.”
Mr Phipps noted that building had recently undergone a significant capital expenditure program which would assist the repositioning of the asset. Over $7 million has been invested in building refurbishments and upgrades, including a new ground floor lobby and foyer, a new chiller and a refurbishment of amenities on every level.
“This would minimise the need for future capital outlays and ensure maximum building efficiency and performance,” Mr Phipps said.
At present, IBM Australia is the building’s major tenant, providing 70% of the total building income. IBM Australia is a subsidiary of NYSE-Listed IBM, one of the largest companies worldwide with a market capitalisation of approximately US$125 billion - providing a blue chip holding income.
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