Mirvac agrees $79m deal for Bris

Mirvac has agreed to buy two prime neighbouring Brisbane CBD sites from listed Singaporean developer Wee Hur for $79 million.

The put and call option agreement covers a site of more than half a hectare between Turbot and Ann Streets adjacent to Brisbane City Hall and is contingent on approval from Wee Hur shareholders and Mirvac securing Suncorp as the tenant for a new office tower on the site.

A previous agreement between Wee Hur and Mirvac, approved in April by Wee Hur shareholders, was for Mirvac to acquire only the 3690 square metre site at 62-80 Ann Street for $65 million with Wee Hur to retain 71-97 Turbot Street, a 1788sq m site where it had sought approval for a 36-storey student housing tower.

In a statement, the board of Wee Hur said the sale proceeds would be used for other developments in Australia.

Brisbane remains one of the country’s weakest office leasing markets with a vacancy rate of almost 16 per cent, according to the Property Council’s Office Market Report, though many believe it has bottomed out. The Australian Tax Office currently has a tender in the market for up to 24,000sq m of office space.

In her AGM address to shareholders last month, Mirvac CEO Susan Lloyd-Hurwitz said the company would continue to allocate 75 per cent of its capital to Sydney and Melbourne, ‘‘while remaining agile to strategic opportunities in Brisbane and Perth’’.

Wee Hur, which is undertaking a massive 1500-room student housing project in Buranda near Woolloongabba, snapped up the two CBD sites, which include the eight-storey Primary Industries Building and parts of the original Brisbane Fruit and Produce Exchange, from QIC for $63 million two years ago.

Wee Hur had sought approval for student housing on the Turbot Street site.

Should Wee Hur shareholders approve the agreement with Mirvac, it can become a binding contract either through Mirvac exercising its call option by May 31 (this can be extended by three months if Mirvac has lodged a development application for the site) or by Wee Hur exercising its put option within 14 days of Mirvac securing a leasing deal with Suncorp.

Should the new put and call option agreement not proceed, the previous agreement for Mirvac to acquire only the Ann Street site for $65 million will remain in place.