Fortius are in exclusive due diligence to acquire 307 Queen Street Brisbane from LaSalle Investment Management in a deal worth $210m.
The 25 storey office building at 307 Queen St is 93% occupied by professional services, finance and consulting firms with a WALE of 3.5 years. The property is an ideal position, on the edge of the “Golden Triangle” precinct.
LaSalle acquired the 19,617sqm property in 2017 from GDI for $142m and a year later acquired the neighbouring heritage building at 297 Queen Street for $52.25m. Both assets were held on behalf of the California State Teachers’ Retirement System (CalSTRS). The opportunity to amalgamate the sites may have held some interest however the heritage listing of No 297 and the significant improvements in place at No 307 would have rendered any redevelopment opportunity as unfeasible.
Brisbane has seen a number of large office transactions so far this year with 10 Eagle Street selling for $285m, and 310 Ann Street selling for $210m, both on a 5.5% yield. The sale of 307 Queen Street reflects similar pricing metrics.
Whilst LaSalle were able to show a 42% uplift in the value of 307 Queen Street over 4 short years, the Group will have to wait longer to achieve a similar return for 297 Queen Street, which is predominantly leased to the University of Queensland. The University is suffering from lack of international students and may be forced into rationalising its CBD space. The asset is likely to be available for sale and would suit an owner occupier with a vision to turn the almost 100 year old building into a state of the art data centre for the Brisbane CBD.
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