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The deal was struck at an equivalent yield of 8.53 per cent and was negotiated by CBRE's Bruce Baker, Flint Davidson and Tom Phipps on behalf of private Brisbane-based company, Harburg Investments.
CBRE's Davidson says that this building garnered considerable interest once it was put on the market.
"The existing building is situated on one of the highest sites in the Brisbane CBD, affording panoramic views over King Edward Park towards the Brisbane River," says Davidson.
"Given the distinct lack of value-add opportunities recently in the Brisbane CBD, 348 Edward Street attracted significant interest from both domestic and offshore buyers chasing core-plus assets."
One of the key points of attraction for some interested buyers was the potential to develop up to 50,000 sqm of gross floor area on the 1,349 sqm site, subject to relevant planning approvals being obtained. This could mean that the building could have multiple uses such as residential use, student accommodation, medical use or hotel or commercial office space use.
"The location near Brisbane's major retail and transport amenities was one of the key draw cards, with prospective purchasers focused on opportunities to either reposition the existing asset or redevelop the site," says Davidson.
It is the most recent Brisbane acquisition for Hines, who also controls two Fortitude Valley assets at 100 Brookes Street and 825 Ann Street.
CBRE says that the IBM building has a net lettable area of 11,484sqm and was recently renovated. Over $7 million was invested in upgrades for the building, including a new ground floor lobby and foyer, a new chiller and a refurbishment of amenities on every level.
"This would minimise the need for future capital outlays and ensure maximum building efficiency and performance," CBRE's Tom Phipps says.
Currently, IBM Australia is the building's major tenant, providing 70 per cent of the building's total income.
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