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The 27-storey Mineral House has been sold by the Queensland Government as part of a property asset sell-off announced by the Newman administration in 2013.
The sale to Singapore's AEP Investment Management has been struck on an initial yield of 8.7 per cent with the property fully leased to the government for at least the next five years.
Mineral House, at 41 George Street, was developed by the government in the late 1970s on 2811sqm site at the corner of Margaret Street.
It was sold through an international expressions-of-interest campaign conducted by Jason Lynch and James Barber, of Colliers International, in what the agents say was a highly competitive marketing campaign that drew a number of bids from domestic and offshore investors.
AEP has acquired Mineral House for its $US250 million Basil Property Trust and it will become a major asset of the investment vehicle and its investors.
"Major assets with WALE (weighted average lease expiry) in excess of five years such as 41 George Street are very attractive as they will be rare for the next several years due to the current CBD market being so tightly held by long term institutional investors," says Lynch.
"The acquisition of 41 George Street was AEP's first acquisition for the Basil Property Trust in Australia and further reinforces Colliers International's cross-border investment capabilities to introduce new sources of offshore capital to Australia.
"The major drawcard for the AEP was the lease to the State of Queensland and the exceptional cash flow security until 2021.
"In addition to the cash flow security, the building also lends itself to a range of redevelopment and value-add options.
"These include office refurbishment and adaptive reuse to hotel, student accommodation and residential apartments."
Mineral House is located in the heart of the Queen's Wharf redevelopment area which will be transformed over the next six years by The Star Entertainment Group (ASX:SGR) into a $3 billion entertainment and commercial precinct incorporating a new integrated hotel-casino resort.
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