$85m Office sold on Brisbane Fringe29 January 2020
Melbourne based Nikos Property Group have paid $85m for a Brisbane fringe office building in Milton ($6,160/sqm of NLA).
The Group, which was founded out of the sale of a retail fuel business in Melbourne in 2016 has continued to acquire commercial assets in Melbourne, Adelaide and now Brisbane, including 549 and 580 St Kilda Rd, Melbourne and 100 Flinders Street Adelaide.
The campus-style offices at 19 Lang Parade in Milton comprise two office buildings with an NLA of 13,800sqm. Tenants include MHPS Plant Services and the Presbyterian Church of Queensland, with a WALE of 2.5 years.
The building was developed in 2011 by MDev Property Group who retained ownership until the current sale to Nikos Property Group.
The property is well positioned within Milton with Auchenflower Train Station within 400m, Coronation Drive bus stop with 125m and 150m to Milton Ferry Wharf.
The Milton Office market has underperformed the Brisbane Fringe market with higher vacancies over recent years.
The latest Property Council of Australia (PCA) vacancy statistics indicate that the overall Brisbane Fringe CBD market vacancy has reduced to 13.8%, its lowest since January 2017, however Milton remains high at 17.5%, despite a record net absorption of 19,848 sqm so far this year. This is after a historical high level of 27.9% in July 2018.
According to Colliers Research, gross effective rents have risen by 6.2% to $356/sqm as at September due to a reduction in incentives.
Brisbane’s broad infrastructure pipeline, which includes the $3 billion Queen’s Wharf Project, Howard Smith Wharves, the new Brisbane Airport Redevelopment, the $5.4 billion Cross River Rail, and Brisbane Quarter, is playing a large part in the city's improving employment base. The expectation is that the CBD Fringe markets will pick up a greater share of any project related workspace.