Major office deals in Sydney and Brisbane

Major office deals in Sydney and BrisbaneIn two of the biggest office deals in Australia since the GFC, Lend Lease has announced the sale of Tower 1 at its Barangaroo development and DEXUS has finalised the acquisition of Waterfront Place in Brisbane. In Sydney, Lend Lease has launched a new commercial wholesale open-ended property fund to invest in the $2 billion commercial Tower 1 at Barangaroo South. Lend Lease One International Towers Sydney Trust is the second fund established to invest in the precinct and will be managed by Lend Lease’s Investment Management business. The new fund will acquire 100 per cent of Tower 1 with $1.4 billion of equity commitments from capital partners and $600 million of debt financing. The Qatar Investment Authority (QIA) will take a 37.5 per cent investment in the fund and the Lend Lease managed Australian Prime Property Fund Commercial (APPF Commercial) 25 per cent. Lend Lease will hold the remaining 37.5 per cent as a co-investor.In Brisbane,Waterfront Place (pictured) and Eagle Street Pier, known as the Waterfront Place Complex, have been acquired by DEXUS Property Group and DEXUS Wholesale Property Fund for $635 million.The development, located within the prime commercial precinct of the Brisbane CBD’s ‘golden triangle’, includes a 59,448 sqm Premium grade office tower and 6258 sqm of prime riverfront retail.The acquisition price of $635 million amounts to $9664 per sqm for the complex and a capitalisation rate of 6.9 per cent.According to DEXUS CEO Darren Steinberg, the acquisition is an “excellent long-term core investment” for both organisations, with Eagle Street Pier offering “one of the best future development sites in the Brisbane CBD”. The purchase also complements DEXUS’s ownership of 480 Queen Street in Brisbane.DEXUS reports that, in the quarter to March this year, office demand in Brisbane’s CBD has increased as vacancy rates fell by one per cent, down to 15.8 per cent.Waterfront Place is currently 90 per cent leased.The sale was negotiated by CBRE, represented by Flint Davidson and Bruce Baker.Davidson, CBRE’s director of institutional investments, says the transaction “shows the big domestic players are still actively pursuing prime opportunities”.