Mirvac Group (ASX: MGR) has increased its presence in the Brisbane office market with the announcement that it has secured Suncorp Group (ASX: SUN) as the key tenant for its $836M proposed office development at 80 Ann St. The 5,550 sqm site, which is being purchased for $79M, will be developed into a 31-storey Premium grade office tower by FY22 providing around 60,000 sqm of space.
Suncorp has pre-committed to 39,600 sqm, or 66% of the space on an initial 10-year lease and is looking to consolidate its operations at the site. Suncorp’s current headquarters are located nearby at Brisbane Square, 266 George St, where it occupies around half the office floorspace with co-tenants the Brisbane City Council. The Charter Hall Prime Office Fund owns 49.9% of Brisbane Square.
The development at 80 Ann Street is expected to provide the largest office floorplates in the Brisbane CBD with flexible configurations. Mirvac has entered into a 50:50 agreement with the M&G Asia Property Fund to develop the tower, valuing the development at $836M, on a capitalisation rate of 5.0%.
This is a major win for Mirvac who won the tender out of some 23 initial proposals to develop Suncorp’s new headquarters. It will also booster Mirvac’s presence in the market, as it currently only has one Brisbane office asset in its $9.4 billion portfolio - 340 Adelaide St, Brisbane, which is valued at $60M. By securing Suncorp, the largest Queensland company, Mirvac will establish a significant presence, with the potential to increase its exposure in Brisbane over time.