AMERICAN private equity group Valparaiso Capital Partners has purchased a tower in Brisbane's CBD for $50 million, with a plan to convert it into student accommodation with up to 1000 beds.
The deal has been rumoured since November 2014, after Boeing Defence Australia chose not to renew their lease for the building at 363 Adelaide Street, which had become known as Boeing House.
Valparaiso, whose offices are in Singapore, have focussed on Australian commercial properties in Brisbane, Perth, and Sydney. Their Brisbane investment criteria includes the target of holding investments for between five and ten years.
Colliers International agent Tom Phipps, who negotiated the sale, says the building attracted prospective investors with a broad range of ideas.
"We had interest from institutional clients, REITs, funds, high net worth individuals, private equity groups, and develops," he says.
"These parties approached us with a range of strategies including office refurbishment, hotel conversion, residential conversion, residential redevelopment, and student accommodation."
The 14-level office building has a net lettable area of nearly 15,000 square metres and received a four-star energy rating from the National Australian Built Environment Rating System.
Jason Lynch, another negotiator, says most parties wanted to convert the building because Brisbane's office-leasing market is contracting.
"Valparaiso has been active in Australia for a number of years," he says.
"They are keen to add to this initial purchase and expand in Brisbane with other developments."
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