Dexus to transform Brisbane office building into circa $500 million student accommodation facility

Dexus to transform Brisbane office building into circa $500 million student accommodation facility

Dexus and Marquette Properties have announced plans to repurpose a B Grade office building in Brisbane’s CBD into a modern, purpose-built student accommodation (PBSA) facility providing 1,200-beds. The asset is expected to be valued at circa $500 million upon completion.

The deal is being acquired through Dexus’s opportunistic fund series, Dexus Real Estate Partnership (DREP), with 5% of the economic interest held by Marquette Properties. Dexus and Marquette Properties will be joint development managers.

41 George Street, Brisbane occupies a high-profile, elevated site and has unique attributes for conversion to student accommodation. The existing structure, centralised lift core and façade will be reutilised, and will include three floors of resident amenities including gym, yoga, gaming and cinema rooms. The 27-storey tower will be the closest student housing to Queensland’s second largest university campus, Queensland University of Technology, and two blocks from the recently announced Griffith University CBD campus, set to open in 2027.

Dexus Group CEO & Managing Director, Ross Du Vernet, said: “This transaction demonstrates our ability to leverage the broad set of capabilities across our platform to create value for clients and investors. This includes special situations investing, office development and refurbishment, and the infrastructure team’s deep understanding of the Australian student accommodation sector.”

Brisbane reflects the broader student accommodation sector across Australia where the current PBSA pipeline of 7,770 new beds due to come online by 2026 will not meet future demand. As one of Australia’s largest owners of student accommodation, Dexus is well placed to source and match product to the local market dynamics.

DREP Fund Manager Jason Howes said: “DREP is committed to delivering superior returns for its investors. By leveraging the capabilities of the Dexus platform, we have created a compelling commercial proposition that has attracted investment from both series 1 and 2.”

As a result of this investment, DREP1 is now fully deployed, having executed 15 investments. DREP2 is currently open for investment and is expected to be substantially larger than DREP1.

Construction of 41 George Street, Brisbane is due to commence in 2024, subject to relevant approvals, with completion expected in 2026.