An A-grade riverfront office building in Brisbane’s fringe suburb of Milton, neighbouring the city’s CBD, has sold for $80 million.
The property at 339 Coronation Drive was purchased by Acure Asset Management’s Brisbane Office Trust from a private fund managed by Keppel in a deal negotiated by Knight Frank agents Justin Bond and Matt Barker in conjunction with JLL’s Seb Turnbull, Paul Noonan and Elliott O’Shea.
The asset, just two kilometres from the CBD, has 12,980 sqm of premier office accommodation over five levels on a 5,843 sqm site fronting the Brisbane River, with 315 car bays. It has a 5-Star NABERS Energy Rating.
It is currently 93% occupied with a with a net passing income of $7,470,545 and a WALE of 3.2 years. Major tenants include CPB Contractors, Holcim Australia, atWorkspaces and Toyota Finance.
The property has undergone refurbishments and upgrades in 2021, after Keppel purchased the vacant complex in 2018 and repositioned it, subsequently undertaking a successful leasing campaign.
Improvements include a new façade, green central atrium (converting it into a new open-air breakout space), atrium café, lift lobbies, end-of-trip facilities, carpark entrance, signage opportunities and tenant fitouts.
Mr Barker said 339 Coronation Drive attracted significant buyer interest during the Expressions of Interest campaign, including syndicators, privates, developers and institutions.
“The commercial property market has begun the recovery, with asset values having returned to growth, but there is more growth to come, presenting the buyer with an opportunity to benefit from future value uplift,” he said.
“Brisbane is one of the cities expected to see the biggest uplift, as it is benefitting from strong population growth, infrastructure projects and of course the 2032 Olympics.
“The scale and opportunity of this site at 339 Coronation Drive provides long-term land value preservation and potential development opportunities.”
Mr Noonan said 339 Coronation Drive is a prominent and highly connected asset, situated in a rare riverfront position on one of Brisbane’s most-travelled roads.
“It’s in a prime inbound position in one of Brisbane’s best-established near-city commercial precincts, and benefits from an abundance of nearby amenity, services and exposure to Coronation Drive.
“The asset also has secure income from a diverse range of tenants, including ASX-listed business, national and international corporations and private companies, who are drawn to the asset’s location, with expansive views and unrivalled access and exposure, as well as its large car park.
“339 Coronation Drive offers the incoming owner a strong initial cash flow, with the opportunity to enhance returns further through a tailored leasing strategy.”
Acure Asset Management Managing Director Angelo Del Borrello said the purchase was a countercyclical investment opportunity in a constrained market.
“In our view, the property represents a compelling investment opportunity in terms of both value and returns, with an attractive purchase price and strong fundamentals driving future returns in the lead up to the Brisbane 2032 Olympic Games.
“Brisbane has been the beneficiary of significant net migration and is seeing the benefit of a strong local economy with favourable dynamics of constrained supply and a positive outlook
“This purchase provides our investors with the opportunity to invest in a distinctive A-grade office tower with expansive views and unrivalled access and exposure.
“It has high occupancy and is located in one of the country’s best-performing office markets, experiencing a strong economic outlook and coupled with constraints on new supply.”
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