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An A-grade office tower in the Brisbane CBD at the bottom of the Queen Street Mall has been acquired by Quintessential from Brookfield for $250 million, of which $137 million was secured in wholesale capital from private investors - the largest capital raise of its kind in the year to date.
The transaction, now settled, follows $38 million worth of upgrades and regeneration works by the vendor at 240 Queen Street, where Quintessential now plans to invest an additional $31 million in regeneration and sustainability upgrades.
The sale price is below a target of almost $300 million as reported by The Australian in April
The site has been home to Commonwealth Bank’s (ASX: CBA) flagship Queensland branch since it had the building constructed in 1989, and it is often referred to as the 'Commonwealth Bank Building'. CBA's largest office in the Queensland capital however is a short walk away at 180 Ann Street.
Other tenants at 240 Queen Street include Hall Chadwick Accountants, the Australian Securities and Investments Commission (ASIC), Hall and Wilcox and co-working office Christie Spaces.
The deal marks Quintessential's second major acquisition in less than a year after the $293.1 million settlement of 1 Margaret Street in Sydney last September.
"We are thrilled with the overwhelming support shown by investors in this milestone fundraising effort," says Avi Gordon, head of Quintessential Invest.
"The success of this capital raise underscores the compelling investment opportunity presented by 240 Queen Street and reaffirms the Quintessential strategy of identifying and capitalising on counter-cyclical market opportunities."
JLL’s Paul Noonan, Seb Turnbull, Kate Low and Jack Sullivan negotiated the sale in conjunction with Justin Bond and Ben Schubert of Knight Frank.
"240 Queen Street is the largest office transaction in Brisbane in the recent market cycle and further cements our market as a keen focus for growth-focused investors," says Noonan.
"The asset’s timeless presentation and prime location will ensure its continued relevance in our market."
Quintessential's chief investment officer Andrew Borger says there is a strong sense of competition in the Southeast Queensland market, especially for premium-grade commercial assets.
"We are incredibly proud to have settled on 240 Queen Street following a competitive negotiation process," Borger says.
"240 Queen Street is already a premium-grade asset, and once the $31 million regeneration works are completed, it will align the building with the best-in-class market practices and enhance its ESG (Environment, Social and Governance) credentials."
Borger believes it is an opportune time to invest in Southeast Queensland, with solid infrastructure and job growth anticipated in the lead-up to the Olympics and beyond.
"Over the next 12-24 months, the arrival of two of the largest pieces of public infrastructure in over 100 years will reshape the Brisbane CBD," he says.
"The Cross River Rail station at Albert Street and the new Metro on King George Square will be less than 400 metres from 240 Queens Street and reorientate the city’s centre to a more central location.
"Since 2022, Brisbane CBD has witnessed the highest net absorption of any CBD in Australia, which is driving not only demand for office space but also fuelling flight-to-quality and competition for premium-grade spaces.
The purchase represents the first for Quintessential in central Brisbane, adding to existing properties Garden Square in Upper Mount Gravatt and the warehouse industry facility at 117 Grindle Rd in Rocklea.
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