Singapore’s sovereign wealth fund GIC has acquired an office tower in Brisbane, Australia for AUD370m (€239m).

GIC purchased Santos Place in the capital of Queensland from the Malaysian government-owned entity Permodalan Nasional Berhad (PNB).

A source involved with the transaction told IPE Real Assets that Charter Hall, acting on a mandate from GIC, had settled on the purchase.

The source said the building, located on the sought-after law court precinct of the city, fronting the Brisbane River, attracted a high level of interest from domestic and international investors.

Asked whether the new owner should be concerned about the 15%-plus office vacancy rate in Brisbane, the source said the actual level of vacancy in premium buildings is low.

“Vacancies are mostly in B Grade buildings,” he said, adding that there is high demand for space from the legal profession and others for such buildings.

The six-star green building, completed in 2009, offers more than 35,000sqm of office space. Its anchor tenant is the Australian resource group Santos.

PNB put Santos Place up for sale in September. It acquired the building for AUD290m in 2010 in what was its first foray into overseas property markets. PNB subsequently bought five office buildings in London.

The transaction, struck on a yield of 5.7%, is the largest office building deal in Brisbane this year.

Charter Hall won a mandate from GIC in March to invest up to AUD500m along Australia’s Eastern seaboard, particularly in Brisbane.

Simultaneously, GIC gave an AUD300m mandate to Primewest, a Perth-based property group.

In October, Primewest purchased 1 William Street in Perth for AUD175m on behalf of GIC.

Sources said GIC is pursuing a countercyclical strategy and is positioning itself for a recovery in the Brisbane and Perth office markets, both of which have suffered following a downturn in the mining sector.