Mirvac sells Brisbane office tower for $104m
Mirvac has sold a Brisbane office tower to syndicator Marquette Properties for $104.4 million as part of a $1.3 billion sell-down of office and retail assets by the ASX-listed developer and investor to improve the overall quality of its investment portfolio.
Mirvac sold the 12-level, 189 Grey Street building with a 20 per cent vacancy in an off-market process to a syndicate of 104 investors managed by privately owned Marquette on a yield, or core capitalisation rate, of “just under” 7 per cent, Marquette managing director Toby Lewis said.
“The larger landlords we’ve been transacting with are seeking to own large buildings, new buildings with large tenants,” Mr Lewis told The Australian Financial Review on Wednesday.
“We are more granular and property to property we look at ‘Is it a good property? What are its fundamentals? Can we keep it full and can it drive a good return?’ It’s excellent office space that we’re happy to take the risk on.”
Mirvac, like larger office landlords around the world, is focusing on higher-value buildings with higher environmental standards and which are likely to attract users even at a time when pandemic-era workforces spend less time in the traditional office space, but which can attract higher rents.
Outgoing chief executive Susan Lloyd-Hurwitz in August spoke of the “bifurcation of tenant and capital demand for modern sustainable real estate” when announcing Mirvac’s plan to sell $1.3 billion-worth of lower-grade assets.
The building developed by Mirvac in 2005 is an A-grade office complex comprising 12,595sq m of net lettable area and 146 car parks, within 200 metres of bus, rail, ferry stops and the future Brisbane Metro line.
The building is 60 per cent leased to insurance company IAG and engineering, procurement, construction management and operations service provider Ausenco.
CBRE agent Tom Phipps, who negotiated the sale, said Marquette had approached Mirvac several times about buying the building.
“With very little REIT, wholesale or offshore direct capital currently active we are seeing syndicators, club investors and privates taking advantage of the current market volatility to secure quality assets that larger institutions deem too small or non-core,” Mr Phipps said.
For Brisbane-based Marquette, the acquisition is the third of a run in the past 18 months that includes the “Blue Tower” at 12 Creek Street and the “Gold Tower” at 10 Eagle Street.
Mr Lewis said his company’s focus was to reuse buildings where possible.
“This push to net zero [carbon emissions] is a really interesting concept. A lot of tenants seeking to hit net-zero will only be able to get into a new building. The most sustainable thing one can do is to retain old assets and improve them rather than knock them down and build new ones,” he said.
“While we’re all for development, it’s certainly a less sustainable practice than trying to improve what you have.”
In June, Marquette also purchased from Lendlease for $82 million 3500sq m of retail and commercial hospitality space across 20 tenancies with 180 metres of waterfront at Barangaroo.
