Queensland’s state Cabinet is expected to approve a $700 million office tower deal with Queensland Investment Corporation before Christmas.
As foreshadowed by The Australian Financial Review in February this year, the Newman government has been working on a plan to sell several government leased office buildings out of its $2 billion portfolio.
The government had earlier denied it would sell any property without getting a “mandate from the people”, however Treasurer Tim Nicholls qualified that statement by saying sales could happen depending on the relocation of government departments.
The deal, which will include the sale of six office towers, is a masterstroke as it will not only reap funds for a heavily indebted government, but it will also cloud the political debate on privatisation as the government’s own pension liabilities, managed through QIC, will be invested in it.
The deal is based on the state government, which is retracting some 40,000 square metres of office space in Brisbane, committing to long-term leases in the buildings, providing an income stream to service the pension liabilities.
The buildings will include the prized 111 George Street and Neville Bonner Building at 75 William Street. The four remaining buildings include the Department of Primary Industry’s 80 Ann Street, Education House at 30 Mary Street, Mineral House at 41 George Street, and a smaller tower at 33 Charlotte Street.
The two parties have declined to comment on the deal, which is in the final throes.
CBRE has valued the buildings and Jones Lang La Salle has advised the government. Law firms Freehills and Clayton Utz are working for QIC and the government respectively.
The Newman government is also close to announcing a preferred tender for the construction of its new 75,000 square metre building at 1 William Street, Brisbane.
Proposals from a shortlist of developers were lodged yesterday.
Market watchers say Construction and Building Unions Superannuation is the front-runner with its secure funding, while Grocon, which won the right to build the Tax Office headquarters in Brisbane last year, is likely to be the most cost competitive.
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