50 Ann Street Sold to Hines27 May 2021
US based Hines group has finalised terms with ESR to acquire the State Law Building at 50 Ann Street Brisbane for $210m.
The fully leased 25,519sqm building is 99.5% occupied by the Queensland State Government’s Department of Justice and Attorney-General and whilst the Government has 4.1 years remaining on the lease, the proximity of the building to the Magistrates, District, Supreme and Commonwealth Courts as well as the Queensland Police Headquarters increases the likelihood of retaining the tenant on expiry.
ESR recently committed approximately $10 million of capital expenditure for an End-of-trip facility, mechanical and electrical upgrades and access/security upgrades which will be necessary to retain the tenant. The property generates $15,877,770 per annum in net income providing Hines with an initial yield of 7.6%.
ESR became the owners of the asset following their take over of Propertylink in 2019. Propertylink teamed up with Goldman Sachs in 2017 to acquire the building for $144.6m from CIMB-TrustCapital Advisors, reflecting an 8.2% yield at the time.
Hines remain bullish on the office market having acquired 600 Collins Street in Melbourne for a $1bill redevelopment.
Brisbane has been a very active market in 2021 with over $1.1bn of major office asset sales so far. These include the sale by LaSalle Investment Management of 307 Queen Street for $210m, the sale by Dexus of 10 Eagle Street for $285m, and the sale of 310 Ann Street for $210m.