Mirvac Sells Brisbane Office Complex to Alceon for A$124M

Mirvac has agreed to sell a twin-tower office complex and adjoining car park in Brisbane's city centre to Alceon for A$124 million. The deal reflects a fully leased yield of 11 per cent and extends Alceon's bet on secondary-grade offices in a tightening market.

Mirvac has agreed to sell a twin-tower office complex and adjoining public car park on the northern edge of Brisbane’s city centre to local investment manager Alceon for A$124 million (US$87 million).

Alceon has exchanged contracts to buy 410 Ann Street and the neighbouring Cathedral Square car park, it said in a statement on Wednesday. Alceon said the price reflects a fully leased yield of 11 per cent and about A$6,000 per square metre, falling to under A$4,000 per square metre once the excess car parking is stripped out. Mirvac is exiting through a separately managed account, Alceon said.

The purchase is Alceon’s 15th Brisbane office investment, according to the company. It extends the firm’s bet on secondary-grade buildings in a market where office vacancy in the city centre fell to 10.2 per cent in July, the lowest of any Australian capital city, according to Property Council of Australia data. Brisbane’s gross effective rents for prime space climbed 11.8 per cent in the third quarter from a year earlier, and have gained 47 per cent since 2022, compared with a 27 per cent increase in Sydney over the same period, according to JLL.

“This is a well-located asset that has been under-managed for some time,” said Todd Pepper, managing director and head of Alceon’s Queensland business. “Our plan is hands-on: invest in the building, lift the tenant experience and lease it up into a market where good space is getting harder to find.”

The twin towers sit on a 4,052 square metre (43,600 square feet) freehold site and have a combined net lettable area of more than 20,000 square metres and 139 parking bays, according to a JLL marketing listing. The neighbouring Cathedral Square car park adds 572 bays on an 8,949 square metre leasehold site expiring in April 2108. The complex is about 375 metres from Central Station, Brisbane’s main rail hub, and close to the Cross River Rail project. The building carries a 5.5-star NABERS Energy rating and a 3.5-star NABERS Water rating under Australia’s national building performance scheme.

Alceon said the complex is about 90 per cent leased with a four-year weighted average lease expiry. Tenants include the Public Trustee of Queensland, First Parking, Mipac, Sonic Healthplus and Dye & Durham. Alceon plans to upgrade the lobbies, common areas and vacant floors to what it called a contemporary B+ standard. Almost half the floor space comes up for renewal in 2028 and 2029. The buyer said rents in the building are well below market rates and that it paid a substantial discount to replacement cost.

Peter Chapple and Bruce Baker of CBRE and Paul Noonan and Jack Sullivan of JLL brokered the deal. Alceon did not say which Mirvac fund held the property or what it originally paid to acquire the asset. Alceon said its Queensland team now manages more than A$1.25 billion in real estate. It funded the 410 Ann Street purchase through its network of high-net-worth and wholesale investors. “We can move decisively because our investors trust our team and we invest our own capital alongside them,” said chief executive David Gribble.