Investor enthusiasm for commercial property equity is regaining momentum as boutique fund manager Quintessential finalised the $174.85 million acquisition of the Green Square North Tower in Brisbane’s Fortitude Valley.
The transaction was backed by a $98 million equity raise that closed oversubscribed in less than three weeks, signalling the renewed strength of Australia’s capital markets as investors return to property amid expectations of lower interest rates.
The 12-storey office building, acquired from super fund investor ISPT, offers investors a 6% to 6.5% annual income yield and a projected internal rate of return of 15% to 19%, reinforcing confidence that the commercial property market is stabilising after years of valuation pressure.
According to The Australian Financial Review, Quintessential Chief Executive Justin Mills said equity investing is making a strong comeback. “Everyone’s talking credit, but there are some great examples of successful equity raises,” he said.
The deal marks another sign of improving investor confidence following a prolonged correction in office valuations, which fell sharply during the post-pandemic period. Private fund managers and syndicators—who have led much of the early recovery—are increasingly active in Brisbane’s office market, where value opportunities are emerging across prime and fringe locations.
Quintessential’s acquisition price represents a 53% discount to the building’s replacement cost of $370 million. That discount is notable amid persistently high construction costs and renewed confidence in Brisbane’s growth story ahead of the 2032 Olympics. Similar optimism is reflected in recent fringe office acquisitions that have highlighted investors’ appetite for strategic repositioning opportunities.
The Green Square North Tower is fully leased, with 80% of its space occupied by government tenants. To strengthen its income profile, Quintessential extended its largest tenant’s lease by seven years and secured another tenant for six, pushing the average lease expiry beyond five years.
The company has also demonstrated its ability to deliver revaluation gains in a challenging environment. A Brisbane office asset it acquired last year for $250 million has since been revalued at $281 million on the back of rental growth.
Beyond office investments, Quintessential achieved another milestone by selling the Port of Adelaide Distribution Centre for $216 million—more than doubling investors’ capital after buying the site for $80 million in 2019.
As private capital continues to drive momentum, market observers expect commercial property to remain a reliable hedge amid economic transition. The Green Square North transaction underscores the growing confidence that equity-led investment strategies can unlock value as Australia’s real estate markets recover.
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