Two Australian property funds have entered a joint venture to redevelop three office buildings in Brisbane.

Investa Commercial Property Fund Charter Hall Prime Office Fund have bought three adjoining buildings in Queen Street for AUD53.7m.

The 45,000 sqm development will include both retail and office accommodation and is expected to be worth AUD500m once finished.

Peter Menegazzo, Investa chief investment officer, said the partnership presents a “fantastic opportunity to create a new generation, high quality building” for Brisbane central business district tenants.

“The spread between asset classes and markets presents a cyclical opportunity to capitalise on appropriate value-add and development opportunities, and this site provides the perfect opportunity at the right time in the cycle,” he said.

David Harrison, Charter Hall chief executive and managing director, said: “With a limited number of identifiable development sites and a forecast improving office market in Brisbane’s central business district financial district, amalgamating these sites for future development provides superior returns to alternative stabilised asset acquisitions in the market.

“The joint venture development and ownership structure with ICPF diversifies risk with a credible institutional counter party.”