Axis Capital have successfully sold the former Flight Centre Head office in Brisbane to a Cromwell managed Fund for $117m.
The property at 545 Queen Street Brisbane sits on an island site in the northeastern fringe of Brisbane’s financial precinct offering 13,100sqm of A Grade space over 10 levels.
Axis Capital paid a GPT unlisted fund $70m for the building in 2017 in the knowledge that Flight Centre would vacate the property, leaving it 70% vacant.
Axis Capital refurbished and repositioned the building over 6 months and leased up the vacant space over a 6 month period to Sonic Healthcare, CSG International, South 32, Calibre, Bentley Systems and McPherson Group. The new leases have been signed at gross rents ranging from $600 per sq m to $625 per sq m on long lease terms of up to 10 years. The property is now 100% leases with a WALE of 4.1 yrs.
The sale to Cromwell is reported to represent a yield of 5.9%.
The property will sit in the Cromwell Direct Property Fund, a retail fund which currently offers a 5.8% distribution yield from a portfolio of 9 assets. The latest product report from DPF (see below) indicates that the income return was 6.1% and the total return for the 12 months to 31 March 2021 from the fund was +3.9% as a result of capital revaluations to the portfolio taking -5.9% off the value of the assets.
The transaction was negotiated by CBRE’s Peter Chapple, Bruce Baker, Flint Davidson and Stuart McCann.
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