Malaysian pension fund Kumpulan Wang Persaraan, known as KWAP, has sold 179 Turbot Street to Mercer Alternatives at a deep discount to their acquisition price.
KWAP acquired the 26-floor, 24,904sqm landmark A-grade office building in 2013 for $172.3m from the Morris Property Group and have now sold the asset for $150.9m, some $21.4m less than their acquisition price. The deep discount reflects the significant vacancy that has arisen in the building over recent years. According to Investa’s website, the building currently has 17,524 sqm of vacant space, representing 70% of the NLA.
The building is prominently positioned in an area which will be transformed over the coming decade by various Olympics initiatives and the Cross River Rail. The site has excellent access to existing major public transport options with Central Station and King George Square Bus Station only 200m away and is within close proximity to the Brisbane Transit Centre (approx. 500m) and the numerous ferry services operating from North Quay Ferry Terminal (approx. 650m).
The property was put to the market by Knight Frank in April 2021.
KWAPs investment was managed by Investa who then introduced Mercer (an existing client of Investa) to the opportunity.
Mercer head of Pacific real estate Padraig Brown reported that “Following significant yield compression across Australia in recent years, we believe that the Brisbane office market currently provides an attractive yield premium, particularly for assets with value-add potential,” he said.
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