PGA Properties pays $53.5 million for Brisbane CBD office 410Q

PGA Properties is paying $53.5 million for an A-grade office in the Brisbane CBD’s coveted ‘Golden Triangle’.

The 14-storey, 5704 square metre building, 410Q, at 410 Queen Street, was listed by RG Property six months ago.

About six per cent of the commercial complex is vacant.

The office also has a 2.8 year weighted-average-lease expiry.

That said, 410Q is trading on a low 5.8 per cent initial yield.

PGA Properties general manager – Property, Frank Martinez, said the company was attracted to the long-term fundamentals the Brisbane market has to offer “and the unique position 410 Queen Street occupies in the financial precinct of the city”.

“The company remains acquisitive for high-quality CBD assets across Australia,” the executive added.

RG Property acquired 410 Queen Street for $28.8 million in 2011 before undertaking a $5.5 million repositioning, upgrading the accommodation quality.

The vendor’s chief executive officer, Rhett Williams, said that with the sale, it can provide its investors with a solid return.

“We see continued growth in the Brisbane market and remain acquisitive”.

On an 868 sqm site at the north east corner of Wharf Street, 410Q includes 46 car parks.

CBRE’s Peter Chapple, Tom Phipps and Jack Morrison with Cushman & Wakefield’s Mike Walsh and Peter Court represented RG Property.

Mr Chapple said the marketing campaign “attracted strong and qualified interest, particularly from new-entrant capital”.

Existing Brisbane CBD landlords “who have been waiting for a trophy” also threw their hat in the ring, the broker said.

Mr Walsh added that from a pricing perspective “the sale [of 410Q] reflects the challenge of acquiring a prime corner asset in the CBD, which is noteworthy when you consider the shorter WALE of the asset and subsequent pricing assumptions buyers factored into their numbers”.

The agents said buyers continue to be attracted to Brisbane because of the flow of investment in infrastructure and entertainment projects underway.

“Foreign interest in the CBD remains strong with activity from Singapore, Germany and – more recently – Hong Kong, and we expect this to increase in 2020,” Mr Walsh said.

Elsewhere in the Brisbane CBD, recently, Cromwell paid $525 million for 400 George Street, while Ashe Morgan spent $425 million for The Complex, at 140 Creek Street.

Since January 2019 there has been $3.05 billion in transactions in the Brisbane CBD – up 114% on the 10-year average, according to CBRE Research.

RG Property upgraded the office accommodation before offering 410Q for sale last September.
A ground floor retail space at 410Q tenanted to Roll’d.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco