The property located at 11 Breakfast Creek Road, secures the JV the last remaining office development site within the established Gasworks precinct. The site has an existing Development Approval for a 14 level A-Grade office tower, with ground floor retail, 188 basement car parking bays and end of trip facilities.
CPOF and John Holland have entered into a JV to jointly develop the project with John Holland also appointed as the builder for the project.
The ‘Gasworks’ precinct, is a flourishing business and lifestyle community only 1.7 kilometres from the Brisbane CBD and the property is a 3,254 square metre vacant site located at the entrance of the precinct, on the corner of Breakfast Creek Road and Skyring Terrace, and adjoins CPOF’s 50% interest in 100 Skyring Terrace, home to Bank of Queensland.
John Holland has pre-committed to the project for two office floors, which will accommodate the company’s Queensland regional office. This will provide the project with a significant pre-commitment prior to construction commencing and boosting the number of major companies operating in the area.
Charter Hall’s Head of Office, Adrian Taylor said: “Charter Hall is proud to extend our strong partnership with John Holland following the successful development of the Western Sydney University Parramatta CBD campus, where John Holland is the construction manager.
“With more than $1.6 billion of committed and development pipeline office projects nationally, our in-house development origination and delivery teams are creating property investment products which are allowing us to add to our $8.1 billion office portfolio. Through developing new core product we are able to provide our investors with access to sector leading institutional grade property investments without competing on market,” Mr Taylor added.
CPOF has the opportunity to secure 100% investment in the new office tower, which would add to its existing 50% interest in 100 Skyring Terrace, a 12 level A-Grade office tower, 100% occupied with the Bank of Queensland (BOQ) as its major tenant delivering 55% of gross income.
Chief Executive Officer of John Holland, Glenn Palin, said the project was another step in Brisbane’s exciting and dynamic property development market.
“John Holland is committed to a strong partnership approach to deliver innovative building developments all around Australia, that meet and indeed exceed the community’s expectations in an environment of rapid urbanisation.”
John Holland is owned by China Communications Construction Company International Holding (CCCI), one of China’s largest construction and infrastructure businesses.
The strategic $1 billion acquisition of John Holland by CCCC Group is one of growth and expansion into Australia, with the objective to not only grow the construction component of the business, but to diversify into property development & investment.
“We formed our Development & Investment division both to consolidate existing skills residing within the Group, as well as to introduce new skills to enhance our capabilities,” said Mr Palin.
“Our new business model has been at the forefront of our ability to be able to provide investment for this project, as well as construction expertise.”
Charter Hall Prime Office Fund Manager, Craig Newman explained that Brisbane’s near City market has stabilised during 2016 recording an improvement in leasing activity with the A-Grade vacancy rate falling from 15.7% to 13.4%.
“This acquisition is in line with CPOF’s investment mandate to own well located, institutional quality assets. The acquisition secures CPOF the last remaining office development site within the ‘Gasworks’ precinct and provides CPOF further exposure to Brisbane’s near City office market. This part of Brisbane’s office market is proving to be resilient in attracting corporate occupiers who are seeking newer built environments.”
Construction is expected to commence in the first half of 2017 subject to securing the required tenancy pre-commitments.