88 Jephson Street in Toowong sold for $25.15m. The  successful buyer is an off-shore investor. The sale, which has only just settled, was negotiated by Christian Sandstrom and Matt Barker of Knight Frank in conjunction with Tom Barr and Jason Hines of Ray White.

The five-level building at 88 Jephson Street in Toowong was last sold in 2019, purchased by State Development Corporation and White & Partners as part of a larger amalgamated site of 1.3 hectares from Stockland.

Key Points:

• 88 Jephson Street in Toowong has been sold for $25.15m
• The 5-level building was last sold in 2019 as part of a larger amalgamated site of 1.3 hectares to the State Development Corporation and White & Partners from Stockland
• The latest sale, which just settled, was negotiated by Knight Frank and Ray White
• The successful buyer is an off-shore investor with property interests on the Gold Coast

It was taken to the market again in February this year following a refurbishment by the vendor, including a $600,000 spend on capital improvements, which was overseen by building manager Knight Frank.

The sale, which has only just settled, was negotiated by Christian Sandstrom and Matt Barker of Knight Frank in conjunction with Tom Barr and Jason Hines of Ray White.

Mr Sandstrom, who introduced the successful purchaser along with colleague Mr Barker, said the five- week Expressions of Interest campaign targeted a wide buyer market including owner occupiers, investors and developers.

“We received over 160 enquiries and at the close of the campaign received seven competitive offers,” he said.

“The successful buyer is an off-shore investor with property interests on the Gold Coast. This is their first acquisition of commercial property and they are considering their longer term options with the site given its substantial development potential.

“The Toowong opportunity generated strong interest from both local and interstate groups looking for existing office buildings that allowed the opportunity to add further value through implementing a repositioning program in addition to longer-term future development upside.

“Opportunities like 88 Jephson Street are limited especially given their close proximity to the Brisbane Central Business District, with this property also offering the benefit of strong retail amenity and transport connectivity given its Toowong location.

“The purchaser, who only recently settled on the acquisition, believes that as a result of COVID and a rethink by businesses on the most suitable location of their office accommodation, business hubs like Toowong will see an increase in tenant demand.”

The Jephson Street property adjoins a recently-approved development, the $450 million Toowong Town Centre, which will be built on the 9,000sq m site at High Street and Sherwood Road that 88 Jephson Street used to be part of.

The proceeds of the sale of 88 Jephson Street will be used by the vendor to develop the Toowong Town Centre, which will be known as The Aviary and is a mixed-use development that will include cinemas, apartments, a hotel, gym and childcare facility.

The 88 Jephson Street building has a total net lettable area of 6,441sq m and secure parking for 136 vehicles, with the site totalling 4,118sq m.

The local plan allows for future development on the site of up to 20 storeys, subject to council approval.

The $25.15 million sale price represented a rate of $3,904/sq m of NLA on a WALE or 1.89 years.

Major tenants within the building include insurance provider Compare the Market, engineering design consultancy Webb Australia, Allsports Physiotherapy and Body Corporate Services.

Mr Barr said that Queensland is expected to perform better than New South Wales and Victoria in the coming years, with a more resilient economy that is less reliant on the international student market, net overseas migration, and corporate headquarters.

“Queensland had the highest net interstate migration of any state or territory in 2019, and our view is that this will rebound very strongly in 2021 now that interstate border controls have lifted," he said.

“Lifestyle, climate, and affordability factors are still key drivers, however what has changed is that net interstate migration is not as tied to white-collar employment growth as it has been historically. Most employers are now much more flexible in the geography of their staff and work from home policies, so many people can now remain in their Sydney or Melbourne job and live in Brisbane much more easily than they could pre-COVID.

“The current infrastructure boom in South East Queensland will further reinforce Brisbane as an investment destination of choice for domestic and offshore capital.”

Mr Barr said moving forward it was expected Australia and Brisbane would be viewed by investors as even more of a safe-haven in the Asia Pacific region given the city’s relative success in containing COVID-19, the co-ordinated government response and recovery package, and its mature medical infrastructure.

“This was evidenced by two of the seven offers on 88 Jephson Street, Toowong coming from Hong Kong-based family offices,” he said.

“We have experienced a significant uptick in transactional activity across the market over the past two months or so and anticipate this to continue into 2021.”