164 Grey Street, South Bank
Marquette acquired a prime office and retail asset in the heart of the very tightly held Southbank lifestyle precinct in early 2016. The asset consisted of a carpark, 5 retail tenancies and three levels of quality high office accommodation and was located a short walk to Southbank Parklands, Brisbane Convention Centre and QPAC.
The asset was acquired with a very short WALE of 1.4 years. Over the 2.5 years of ownership Marquette was able to drastically improve the asset with the following:
- Re-leased all the office space on 3-10 year leases;
- Re-leased all the retail on 5-7 year leases;
- Added a new retail shop;
- Fully upgraded the buildings services; and
- Created a new office lobby and building entry
Once the refurbishment was complete, and all the tenants were settled, the property was marketed for sale throughout Asia. There was wide-reaching interest in the asset due to its strong underlying fundamentals such as location, infrastructure proximity, amenity, vacancy and more. The quality refurbishment and long leases (to strong tenants) also generated interest and a market-leading pricing outcome for an asset of this kind (in the near city market) over the last decade.
Marquette was able to deliver a total return of 21% which was well in excess of our forecast underwrite.
The investment was made in Joint Venture between Marquette Investment Managers and Moelis Australia.