Weekly Transaction Update - 1st March


This week we recorded 21 major transactions worth $987M

GPT take up 50% Southbank for $342M

The GPT Wholesale Office Fund has moved to exercise its pre-emptive right to acquire the remaining 50% stake in 2 Southbank Boulevard after its co-owner Frasers Property Australia moved to sell it.

The $342m transaction prices the half stake in the 38-storey tower on a tight 5 per cent yield.

The GPT / Fraser co-ownership of the 55,000sqm tower has been focused over the last few years on re-leasing the tower after PwC's decision to move out of 23,000sqm in 2017 to move into a new building developed by Mirvac. The group introduced fresh tenants to occupy most of the 13 floors including; CUB, WPP AUNZ, Saputo, Built, Microsoft and Space&Co.

The GPT fund bought into the tower in 2014, a trophy it gained through its tussle with Dexus for control of the $4 billion Commonwealth Property Office Fund.

Dexus & Goodman in $231.2M trade in Macquarie Park

Dexus has offloaded a "non-core" asset in Macquarie Park in $231.2M sale to Goodman of its 11 Talavera Rd Business Park.

In this case, one man's trash is another man's treasure as Goodman seeks to increase their holdings in the precinct.

The property at 11 Talavera Road, comprises three A-grade buildings and includes two cafes, a restaurant, gym, swimming pool, tennis courts and a childcare centre with a total NLA of 35,700sqm and a WALE of 3.9 years.

Goodman's purchase price represents and initial yield of approx 5.56%, a market cap rate of approx 6.0% and a capital value of $6,476/sqm.

Dexus lodged a Development Approval for a new 26,000sqm building on the corner part of the site fronting Lane Cove Road and whilst Council support the application, RMS have not supported application, advising that an upgrade to Lane Cove Road / Talavera Road intersection would be required to cater for future traffic.

Heitman & Marquette buy in Brisbane

Global investment manager, Heitman LLC have partnered with Marquette properties to acquire 288 Edward Street Brisbane from Quadra Pacific for $115M.

The sale price represents a capital value of $5,757/sqm of NLA and compares to other recent transactions including 100 Edward Street which sold in August 2018 for $60M or $8,427/sqm and nearby 160 Ann Street which sold for $133M in mid 2017 for $8,313/sqm.

The Brisbane office market has seen a greater level of attention in the past year as Sydney and Melbourne assets become harder to secure. Since July 2018, ten major transactions have occurred in the Brisbane market worth $1.4Bn with an average cap rate of 6.19% and an average capital value of $9,645/sqm.

288 Edward Street is well-located, CBD B Grade office building offering 19,975sqm across 27 levels of office space, ground floor retail and one basement level of car parking. The building has a side core and an average floor plate of 688sqm allowing for flexibility in office and floor layouts.

Quadra Pacific, a Canadian company, acquired the asset, along with 133 Mary Street over 25 years ago and offered both assets to the market late last year.

Heitman have deployed a capital from their Heitman Asia-Pacific Property Investment platform which is a value-added, closed-end Asia-Pacific fund series, primarily partnering with local active managers. To date, Heitman have partnered with Abacus in the $170M acquisition of 1 King Street Fortitude Valley; with Elanor Funds on the $178M acquisition of Waverley Garden Shopping Centre from Blackstone, and with Fortius on the acquisition of the Brisbane Barracks for $162M.

Heitman have also sold out of a number of previous investments including 35 Boundary St, South Brisbane, 180 Queen Street Brisbane, and 32 Walker Street North Sydney, each with Abacus as a JV partner.

The latest transaction at 288 Edward Street was brokered by JLL.

Primewest acquires 226 Adelaide Terrace Perth

Blackstone has sold an A-grade office building at 226 Adelaide Terrace in Perth's eastern CBD precinct which was part of a portfolio of 11 assets acquired from South Australia's Motor Accident Commission for $500 million in mid-2017.

The 14,391sqm property which is 100% leased has sold for $86 million to John Bond's Primewest reflected a yield of over 11 per cent.

Built in 2010, the property, at the corner of Adelaide Terrace and Hill Street has six levels of A-grade office space with large flexible floor plates and a central atrium offering an abundance of natural light.

The buildings tenants include two Commonwealth Government departments, Italian oil giant Eni and Wood & Grieve Engineers with a weighted average lease expiry of 2.3 years.

The passing rents are higher than market and the lease renewals are likely to bring the yield down over the next few years. Primewest will likely aim for a 7.25% distribution yield whilst using surplus cash to repay debt and build a contingency for lease renewal incentives.

63 Pine Rd Yennora Sold for $64M

According to the LPI a site at 63 Pine Road was settled on the 15th February 2019 for just under $65 million. The site is home to Fife Capital's Yennora Logistics Hub, comprising 3 buildings over a 16ha site.

Fife Capital have been working on the development applications for the site since 2016. The first building comprises 25,850sqm and is split into two tenancies with a pre-commitment over 8,400sqm.

The site was being marketed by Colliers in early 2018 and according to the LPI the property was exchanged on the 29th June 2018.

The buyer remains a mystery.

Review our other transaction data at ReSourceData.

* indicates unconfirmed price or apportionment of a portfolio sale

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SYDNEY   NSW   1225

Tel: +61 412 173 476

Email: warwick@cmaust.com

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