207 Wharf Street, Brisbane

For its first project, Land & Homes entered into agreement to purchase a commercial property at 207 Wharf Street, Brisbane for redevelopment as its initial model residential project. The site is a prime residential apartment location with great elevation on the highest peak of Brisbane offering excellent views within walking distance of the CBD. 

The settlement of the property purchase at 207 Wharf Street, Brisbane was completed on 24 Feb 2016. 

Existing Property

The 207 Wharf Street property has a site area of 2,433sqm and is currently occupied by a 4 level commercial building with 2 basement car-parking levels. The property was purpose built in the mid 1990’s for the Commonwealth Government to house the Australian Federal Police (AFP). 
The building was developed privately on freehold title and has been owned by the current vendor since 1996. 
The AFP remains in occupation as the exclusive tenant under a commercial office lease. The net lettable area is 5,058 sqm over 5 levels. The tenancy includes use of 62 basement car spaces and 7 at ground level. Current net rent is approximately $1.99 million per annum. 
The current lease term expires 31 March 2016 but the Commonwealth have requested an extension of one year with an option for a further 12 month term. This has been agreed subject to, a 6 month notice of termination clause exercisable on 90 days notice at any time after 30 September 2016, to minimize any delay to the development program. Rent will increase by 5% for the lease extension period.
The property has been inspected by a licensed building surveying consultant. The general building is considered in fair condition for its age and current use. All main services such as lifts, electrical, air conditioning and fire services, have been regularly maintained by the Lessor with reputable service providers under annual service agreements. 
Draft Spring Hill Renewal Strategy

Under the Draft Spring Hill Renewal Strategy, a new building can be built on the site up to a minimum of 20 storeys (250 apartments) or up to 30 storeys (389 apartments), subject to final approvals. The Company's strategy is to replace the existing commercial building site with attractive modern apartments when the lease expires, significantly increasing its value.
The new development will take the form of a single tower with multi level basement and a 4 level commercial podium. The apartment product will be positioned to appeal to both owner occupiers and investors.

The Company's Option and Contract of Sale allows for the complete purchase of the property as a going concern in February 2016. 

The Wharf street precinct is undergoing a significant enhancement in value and development potential through the introduction of the new Spring Hill Neighbourhood Plan (SHNP) expected in early 2016.

This new town planning scheme envisions the precinct as a logical extension of the Brisbane CBD. The SHNP will allow a substantial increase in the permissible height of new buildings and a commitment to improvements in the local civic amenities to encourage growth in the residential community.