JP Morgan takes Challenger's Brisbane tower in $250m deal
JP Morgan has snapped up Challenger Life’s major office tower in Brisbane for about $250 million in a deal that adds further momentum to the city’s investment market, where there have already been several major transactions in the last month.
Challenger Life bought the building at 53 Albert Street in 2014 for $209 million from a syndicate operated by local accountant Earl Larmar.
That same year the state government – the building’s major tenant – struck a record leasing deal which saw it get an incentive of 51 per cent, or about $33 million, to stay as the sitting tenant for the 18,000 square metres of office space in the A-grade office tower.
The latest deal is understood to have been struck on an initial yield of 6.4 per cent.
It was brokered by CBRE’s Bruce Baker, Flint Davidson and Tom Phipps, who declined to comment on the transaction.
The deal adds momentum in the Brisbane market where there have been a string of big sales.
Blackstone and 151 Property sold 127 Creek Street, Brisbane for $129 million to Firmus Capital in what was its first acquisition within the Australian market.
While Charter Hall Group, on behalf of Singapore’s sovereign wealth fund GIC, acquired the landmark 343 Albert Street office tower in Brisbane for $108 million.
JP Morgan has already been circling the Brisbane for office tower investments Challenger has been looking to exit in the Queensland capital city.
Challenger, which own the Barracks on the CBD fringe, has been assessing the merits of selling that asset as well but it is yet to make a final decision.
The fundamentals in Brisbane’s investment property market have been firming. The city’s prime office vacancy rate is expected to fall to 8.9 per cent by the end of the year – down from more than 12 per cent at the start of the year, according to CBRE.
