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IIG will fund the property through development, and own the property at practical completion, which is due in late 2018. The purchase price reflects a net passing yield of 6.5%.
At 45 metres, 5 King will be the tallest engineered timber building in Australia with more than 14,000sqm of A-grade office accommodation over nine levels, and almost 500sqm of retail space on the ground floor.
IIG and Lendlease are targeting a 6 Green Star Design & As Built rating, the highest available accreditation from the Green Building Council of Australia, and a 5 Star NABERS Energy rating.
The environmental performance will come from 5 King's use of cross laminated timber (CLT) and glue laminated timber (Glulam), as well as energy efficient LED lighting, occupancy sensors, optimised air-conditioning and rooftop rainwater harvesting.
Engineered timber buildings produce around half as much carbon dioxide during construction compared to equivalent concrete and steel structures. They also produce less CO2 during ongoing operation.
The building will use Glulam for the structural beams and columns, and CLT for all the other major elements, including floors, lift-shafts and stairs.
The 5 King acquisition is the second major transaction for IIG and Lendlease, following K1 Kingsgate, a Green Star 6 Star As Built certified commercial building in the same Showgrounds precinct.
IIG CEO Chris Lock says the company is committed to helping Australia move to a low-carbon future and 5 King demonstrates IIG's approach to property investment.
"Our long-term view on the Brisbane office market is that the demand will continue to strengthen, particularly for A-grade and new office stock in and around the Fortitude Valley and Urban Regen precincts," he says.
The anchor tenant will be the global engineering and infrastructure advisory firm Aurecon, also the project's lead engineer, which has committed to a 6,500sqm, 10-year lease over four office levels and a small amount of the ground floor.
"Aurecon is strongly invested in 5 King: not only do we take pride in the structural, ESD and building services engineering design, but the building will house some 600 Brisbane staff, or 8% of the staff in our global firm," says Neil Barr, Aurecon's Queensland regional director.
Lendlease has provided 5-year rental guarantees for the remaining office floors and the ground floor retail spaces and will also retain responsibility for leasing the remaining 7,900 sqm of space during the construction phase, with all new leases subject to a number of contracted minimum terms.
5 King was designed by Australian architectural firm Bates Smart. It will be Lendlease's fifth engineered timber building in Australia after International House, Sydney, Forte Apartments and ibrary at the Dock in Melbourne, and Jordan Springs Community Hub in Western Sydney.
The tower is serviced by 56 car parks over one basement level, and has 152 bike racks, 16 showers and 158 lockers.
5 King will be one of the final projects to be delivered in the $2.9 billion renewal of the Brisbane Showgrounds precinct in Fortitude Valley, 1.5 kilometres from the Brisbane CBD.
The Showgrounds renewal started in 2011 and extends over 22 hectares of brownfield land. It includes 340,000sqm of new residential, commercial and retail space. Brisbane Showgrounds owner, RNA, expects to attract 1 million visitors annually to the precinct.
Business News Australia
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