Australian property investment group Quanta Investment Funds (Quanta) has purchased a recently-refurbished office asset in Brisbane’s CBD from Anton Real Estate Partners for $39 million.
Quanta’s bid for 157 Ann Street was bolstered by new lease agreements that took the office tower’s occupancy from 46.6% to over 90%, and the passing yield from 3.47% to 8.91%.
The flurry of new leasing included a 2,700sqm deal with EMF Sports Performance and Recovery Centre, with plans to launch its Brisbane flagship health centre in 2023.
As the second acquisition under the group’s new brand, Quanta CEO Stacey Jones said 157 Ann Street was a strong fit with Quanta’s portfolio growth strategy.
“We are really pleased to bring a commercial asset of this calibre to our investors, with immediate upside via new tenant leasing, offering compelling distributions, an increase from initial valuation and a WALE of 6.6 years,” Jones said.
“Investor support was strong for this strategic opportunity, which was fully subscribed within 12 days; and will deliver a distribution of 8.15% in its first year.”
The $7.8 million refurbishment of the 14-level tower was an impressive drawcard for tenants, with lift upgrades, a foyer upgrade and on-floor works delivering high-quality accommodation and amenities.
“We are thrilled to provide 2,700sqm to EMF, a national success story who are leading the way in health and recovery. With fit-out designs and planning for their flagship wellness, fitness, performance and recovery centre well underway, this will bring new amenity to the Brisbane CBD,” Jones said.
The property was originally acquired in 2013 by active boutique investor Anton, led by principals Tony Martin and Anthony Kingsley, as a risk adjusted high yielding asset play with BCC as anchor tenant.
Set between Central Station and King George Square Interchange, Brisbane’s two key transport hubs, the 6,576sqm Ann Street tower is now positioned to accommodate the city’s most active tenant base, being the sub-500-square-metre, fitted-suite market.
The sale was a joint effort between CBRE’s Adelaide O’Brien and Jack Morrison, and Jason Lynch from Colliers.
O’Brien said the sale follows a flurry of middle-market transactions in Brisbane, demonstrating liquidity in the sub-$100-million landscape.
“While market fundamentals have become more challenging over the course of the year, groups with conviction around the occupier market are proving to be rewarded,” O’Brien said.
“Data from Property Council of Australia has shown we are experiencing the lowest vacancy rate since 2012 in the CBD B-Grade market at 11.5%, demonstrating demand for quality, yet affordable accommodation, largely driven by SMEs.”
Lynch said the SME occupier market has performed strongly (year-to-date) in 2022, with 67% of all Brisbane CBD lease transactions less than 500sqm and further 85% of all leasing deals in the Brisbane CBD less than 1,000sqm.
“Notably, there was significant buyer depth in the sales campaign, with offers received from both domestic and offshore capital. In 2022 (year-to-date), there have only been two institutional quality office transactions in the sub-$100 million price bracket within the Brisbane CBD – including 157 Ann Street.”
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