Alceon secures 15th Brisbane office investment with $124m Mirvac deal

Alceon has exchanged contracts to buy a Brisbane office complex and adjacent car park from Mirvac for A$124 million ($87 million). The deal for the 410 Ann Street twin-tower complex and the adjoining Cathedral Square car park marks the investment firm's 15th office acquisition in Queensland.

The transaction gives Alceon control of a 20,379 square metre office asset and parking facilities on the northern edge of the city's central business district. The property sits on a 4,052 square metre freehold site and is about 375 metres from Central Station, close to the Cross River Rail project. The neighbouring Cathedral Square car park adds 572 bays on an 8,949 square metre leasehold site with a lease running until April 2108.

Yield and pricing advantage

The purchase price reflects a fully leased yield of 11 percent, significantly above the average prime yield of 6.70 percent recorded across Australian city centres in the third quarter. The deal equates to about A$6,000 per square metre, a figure that falls to under A$4,000 per square metre once excess car parking is removed. Prime city centre values remain approximately 32 percent below replacement cost.

Alceon said the complex is about 90 percent leased with a four-year weighted average lease expiry. Tenants include the Public Trustee of Queensland, First Parking, Mipac, Sonic Healthplus and Dye & Durham.

Market context and vacancy trends

The acquisition occurs amid a tightening Brisbane office market. Office vacancy in the city centre fell to 10.2 percent in July, the lowest of any Australian capital city. Brisbane’s gross effective rents for prime space climbed 11.8 percent in the third quarter from a year earlier and have gained 47 percent since 2022. Over the same period, Sydney’s prime rents increased 27 percent.

Todd Pepper, managing director of Alceon’s Queensland business, noted the opportunity. "This is a well-located asset that has been under-managed for some time," he said.

Refurbishment and lease strategy

Alceon plans to refurbish the lobbies, common areas and vacant floors, targeting a B-plus standard for the property, which currently holds a 5.5-star NABERS Energy rating and a 3.5-star NABERS Water rating. Almost half the office space is due for lease renewal in 2028 and 2029, providing a clear avenue for value enhancement post-upgrade.

The sale was brokered by Peter Chapple and Bruce Baker of CBRE and Paul Noonan and Jack Sullivan of JLL. Mirvac held the property via Leader AutaInvest II Pty Ltd on behalf of a managed fund, and the sale was conducted through a separately managed account. Alceon did not disclose which Mirvac fund held the property or its original acquisition cost.

Alceon funded the purchase through its network of high-net-worth and wholesale investors. Chief executive David Gribble said the firm's model facilitates swift action. "We can move decisively because our investors trust our team and we invest our own capital alongside them," Gribble said. Following this deal, Alceon’s Queensland team now manages more than A$1.25 billion in real estate.