Brisbane’s Sofitel Sold as Post Office Square Revamp Begins

There is movement at Brisbane’s Central Station—well, at least on either side of its tracks.

In the city’s largest single asset hotel transaction, the 30-storey, five-star Sofitel hotel has changed hands in a $178 million deal.

Canada’s Brookfield Asset Management has offloaded the landmark 416-room hotel—sitting above the station on the Turbot Street side of the tracks—to Singaporean property and hospitality giant City Developments Limited (CDL).

The brutalist hotel was designed by Conrad Gargett Architects and built in 1984.

Brookfield had held the hotel for more than a decade after acquiring it as part of a $410-million takeover of Thakral Holdings in 2012.

It unsuccessfully put the asset up for sale the following year with an asking price of more than $200 million.

The recently-inked deal struck with CDL at the discounted price was negotiated by McVay Real Estate and CBRE Hotels.

It comes off the back of Australian hotel sales hitting $2.14 billion in 2022—the second-highest transaction volume on record—with significant equity capital still on the sidelines waiting to be placed.

“The sale of Sofitel Brisbane Central speaks to the renewed focus of both domestic and offshore investors for high quality assets that can tap into south-east Queensland’s growth story in the lead up to the 2032 Olympics,” McVay Real Estate’s Sam McVay said.

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▲ Sofitel Brisbane Central hotel has changed hands in a $178-million deal.

McVay said wide ranging buyer interest was fielded, with 11 offers received from private and institutional capital, including a substantial level of offshore parties.

“There remains very strong interest in the hotel capital markets for high quality, well located assets,” he said. “Brisbane’s growth prospects in the lead up to the 2032 Olympic Games, coupled with its recent economic and growth outperformance make it a standout location for hotel investment.”

Post Office Square redevelopment begins

Nearby, on the other side of the Central Station tracks, construction is under way on the multi-million-dollar redevelopment of LaSalle’s historic Post Office Square food and retail hub.

The refurbishment of the subterranean arcade linking Adelaide and Queen streets has been designed by Arkhefield to improve connectivity and accessibility as well as “bring a sense of the outdoors in through biophilic design … to seamlessly blend with the familiar green space above”.

“Post Office Square has a wonderful connection to a rare urban park in the CBD,” LaSalle’s Simon Juniper said.

“Our aim is to build on this strong outdoor connection to provide workers and visitors to the CBD an offering that has been lacking for some time. We will be expanding the internal spaces and providing a wide variety of offerings to cater for the city workers and visitors, from morning to night.”

Post Office Square has been repositioned several times since its inception in 1983.

JLL retail leasing specialist Taylor Macri said trade would continue throughout the “future proofing the centre”.

“Major works will elevate the centre and encourage an extension in the trading hours, something that is currently lacking in this part of the city,” Macri said.

He said the redevelopment also would enable it to “act as a gateway to a thriving inner-city landscape, coinciding with Brisbane’s countdown to the 2032 Olympics”.

Post Office Square is positioned in one of the CBD’s densely concentrated trade area for office workers, with 122,000 workers within a four-minute walking radius.

Article source: Queensland Property Investor