Kingsgate Sells for $170 million

Delivering IRR above 17%, and a NABERS Energy rating of 6 Stars

Published: September 4, 2018

We’ve sold the Kingsgate office tower in the Brisbane Showgrounds for $170m.

The sale delivered investors a healthy IRR above 17%, alongside an impressive uplift in Kingsgate’s environmental performance.

Our K1 Property Trust purchased the property from Lendlease on completion, in June 2015 for a price of approximately $131m.

At acquisition Kingsgate had occupancy of 55%, and with already-high environmental ratings of NABERS Energy 5 Stars.

Impact Investment Group’s property and impact teams, working alongside building managers JLL, leased the remaining 45% NLA, and implemented a set of environmentally sustainable practices that improved Kingsgate’s NABERS Energy rating to 6 stars, the highest available rating, which equates to a global best standard.

The property sold to a joint venture between ASX-listed Abacus Property Group and global real estate investment management firm Heitman.

Impact Investment Group’s Head of Real Estate Funds Management, Darren Brusnahan said, “This is a fantastic result for our co-investors. We have a very active approach to managing real estate for impact and for financial returns. It has delivered great outcomes on both fronts.

“Kingsgate shows that impact investments can sit very comfortably at the core of a standard investment portfolio, competing with and outperforming mainstream returns.

“It’s also a great sign for the Brisbane market; the city’s yields look good to international investors like Heitman, as well as Australians, and that’s bringing in a lot of capital.

“We’re still invested in the Brisbane Showgrounds through the innovative 25 King – the world’s tallest office tower built out of engineered timber, just opposite Kingsgate.

“The Brisbane Showgrounds is showing how Lendlease are a world leader creating vibrant and sustainable precincts; it’s another reason we value our relationship with them so much.

“We’re thrilled that Heitman and Abacus are joining us as neighbours in the Brisbane Showgrounds precinct.”