London fund managers trade Fortitude Valley office

HQ South contains over 1500 square metres of ground floor retail.

Savills Investment Management has purchased a modern Fortitude Valley office for c$110 million.

The deal for the HQ South tower at 520 Wickham Street (pictured, top) was struck with another London-based fund manager, M&G Real Estate, which listed in February.

The result reflects a loss on the $119.5m it paid Swiss investment house AFIAA in 2017 as part of an asset+cash swap deal for a Melbourne office (628 Bourke St, then valued at $181m).

That seller acquired HQ South new in 2010, paying developer Leighton $94m.

CBRE’s Peter Chapple and Bruce Baker with Knight Frank’s Justin Bond and Paul Roberts represented M&G.

Savills IM is 25 per cent controlled by Samsung Life.

HQ South

HQ South contains 14,588 square metres – about 10 per cent of which is ground floor retail.

Some 71pc of the A-grade office area is occupied by CIMIC, which is rumoured will vacate upon lease expiry in 2026.

Other tenants include accountancy AH Jackson & Co, professional services firm, RPS Australia, and Next Medical Practice.

The site spreads 3017 sqm at the north east corner of Brookes St.

“We believe this asset is an outstanding example of a building that holds broad appeal to investors and businesses alike given its commitment to modern and environmentally focused amenities, accompanies by rich retail and food services in the immediate proximity,” Mr Bond said, upon listing the asset (story continues below).

M&G Real Estate with Mirvac recently purchased a half-stake of the EY Centre.

“With an income profile anchored by a global infrastructure constriction consortium, HQ South offers excellent medium-term lease rental income with time exposure to Brisbane’s population and infrastructure growth trajectory,” Mr Chapple added.

The asset was constructed with a neighbouring 29,000 sqm office, HQ North, now owned by Cromwell.

Savills IM returns to Brisbane

The HQ South purchase comes four months since Savills IM teamed with Greenpool Capital to buy Perth’s Forest Lakes Shopping Centre for $81.5m.

DHL Investments, affiliated with the founders of Don Russell Homes, was that seller.

Last year, Savills IM offloaded the Station Oxley mall to Haben for $47m.

That property was the group’s first in Australia for a mandate – costing $43.5m in 2017.

M&G, meanwhile, last July partnered with Mirvac, paying $578.5m for a 50pc stake in Sydney’s landmark EY Centre.

Also mid-last year the British group sold shopping centre Casey Central, in Melbourne’s south east, to Haben and JY Group – banking $225m, reflecting a modest capital gain on the ($220.75m) price it paid five years earlier.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of