Telstra sells Brisbane telephone exchange to Firmus Capital
Telstra has sold its telephone exchange building at 280 Elizabeth Street in the heart of Brisbane’s CBD to Singaporean group Firmus Capital for $57 million.
The building, which sits on a large 1,670-square-metre land holding ripe for redevelopment, sold on a yield of about 5.57 per cent.
Boasting a a net lettable area of 10,600 square metres, the property is fully-tenanted by Telstra and sold with a seven-year leaseback to Telstra before any redevelopment can take place.
The acquisition was struck on a triple net lease basis, where Telstra as the tenant pays all maintenance and taxes associated with the property. The net annual income for the property is $3.18 million.
The sales campaign was run by Justin Bond and Matt Barker of Knight Frank while Charter Keck Cramer advised Telstra on the deal.
The Edison telephone exchange attracted the interest of several prominent institutional investors with the allure of significant redevelopment potential within Brisbane’s “Golden Triangle” precinct. The site can be redeveloped to Brisbane CBD’s maximum height limit of 274 metres. It’s understood GPT was one of the underbidders.
“The sale of Edison Exchange will likely activate a previously underutilised strategic CBD site, which could evolve into a premium office and retail development,” Knight Frank’s head of institutional sales Justin Bond said.
The site at 280 Elizabeth Street was part of Brisbane’s first telephone exchange, which opened in 1880.
New player
Firmus Capital, which is a relatively new player in the market, was formed in 2017 by Lim Su Kiat, a co-founder of Rockworth Capital.
The investment manager also owns the nearby 18,300sq m tower at 127 Creek Street, which it bought from US property group Blackstone for about $130 million in mid-2018.
There are several other big-ticket assets for sale around Brisbane’s Golden Triangle. One of the world’s largest sovereign funds, Abu Dhabi Investment Authority, is selling its 50 per cent stake in one of Brisbane’s landmark office towers, the 35,000-square-metre, 30-floor building at 66 Eagle Street, which is thought to be worth about $400 million in total.
The biggest office tower to hit the Brisbane market in recent years is the 44,000-square-metre, A-grade building at 400 George Street, which is being offloaded by US property giant Blackstone and German group HSBC Trinkaus, through JLL and CBRE. Market sources put the value of the asset at about $530 million. It is understood Cromwell Property Group is planning to acquire the building with the help of its $375 million capital raising announced on Wednesday.
