After offloading almost $1.5 billion worth of Sydney properties in the past six months, Dexus Group is turning its attentions to the Sunshine State for another asset sale to free up cash for an ambitious project pipeline.
Commercial real estate groups Knight Frank and Savills have announced Dexus and its office partner are looking to sell 10 Eagle Street, a 32-level A-grade building known by locals as the "Gold Tower".
The tower, which was the Queensland capital's tallest when completed in 1978, offers approximately 27,826sqm of net lettable area (NLA) in the heart of Brisbane's business precinct.
Knight Frank partner for capital markets Justin Bond describes the offering as the most significant investment opportunity to be offered in the city's market this year.
"While investor interest in Brisbane has continued during COVID-19, there has been limited availability of quality investments for sale," says Bond.
"No institutional office transactions have occurred within the Brisbane CBD since the sale of 66 Eagle Street in late 2019.
"As such this asset is expected to attract strong pent-up demand from both offshore and domestic investors, with the biggest drawcards being the prime Eagle Street position, diverse income profile and future development upside."
Bond says investment activity in Sydney and Melbourne has resumed and expects Brisbane to follow, particularly for assets within the so-called Golden Triangle between Eagle, Queen and Edwards Streets.
"The significant infrastructure investment within the Brisbane CBD, along with long term population growth, stable governance and Australia's safe haven status, will encourage further investment into Brisbane," he says.
"While demand was particularly strong from overseas investors pre-COVID, we continue to receive significant enquiry from cross-border capital this year, but a lack of investment opportunity in Brisbane has prevented transactional deal flow."
Savills Australia's state managing director for Queensland, Anthony Ott, says the location of the building and occupying a premium position along the tightly held Eagle Street, presents a rare opportunity for investors.
"Investors will be drawn to not only the premium location, but the future development opportunity to add another building on the site or perhaps extend the floor plates," he says.
"The property is in proximity to all the major CBD infrastructure projects in Brisbane, with $12.8 billion in developments within a kilometre radius, underpinned by the Cross River Rail and the waterfront precinct redevelopment.
"The building is already surrounded by significant amenity with popular shopping, entertaining and dining precincts in the vicinity including Eagle Street Pier, Queen Street Mall and the Edward Street retail hub, with public transport, including the ferry, bus and train, also nearby."
He says the underlying asset fundamentals of 10 Eagle Street also complement Brisbane's most active tenant market at the moment, which is in the 200sqm to 1500sqm size range.
The location of the Gold Tower, also known as AMP Place, sits opposite the site where Dexus aims to build the $2.1 billion Waterfront Brisbane project with two towers of 49 and 43 storeys where the 30-year-old Eagle Street Pier building currently stands.
A development application for the project was lodged with the Brisbane City Council in June.
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