Brisbane was experiencing increased office construction activity, and White & Partners identified an opportunity in the fringe Brisbane office market. The 2,654sqm commercial site in Toowong was purchased for $5.5 million in a joint venture with the State Development Corporation. Ten minutes by car to the CBD, the site benefited from frontage to Coronation Drive, adjoinment to a main railway station and to Toowong Village.
On securing the site, the existing development approval was varied and optimised, and 40% tenancy pre-commitment was obtained to enable construction under a fixed price contract. The balance of the office space was also let prior to the completion of construction. This was particularly important as this site acquisition occurred in an environment of rising construction cost. Construction was completed ahead of schedule with all contingency allowance unspent.
Upon construction completion, investors’ unrealised gross returns exceeded 50% p.a. Post completion, investors also benefited from equity distributions in excess of 10% p.a., of which a significant portion was tax sheltered by depreciation credits.