Weekly Transaction Update - 28th April
With the Easter holiday season now behind us the next few months are likely to heat up with a number of large transactions hitting the books. This week we saw just under $1.4B in property change hands with 2 major deals over $300M each.
The first of the major deals was the purchase of 20 Bridge Street Sydney for $330M by a Chinese private investor. Sources suggest that this property was acquired with little due diligence on a single visit to Australia. The reported yield of 4.3% is a new low and will likely lead to higher valuations once this transaction finally settles. The Vendor, Malaysia's Kumpulan Wang Persaraan (pension fund) purchased the asset in 2011 for $185M.
The second major deal this week was the purchase by GIC of a portfolio of student accommodation beds in Kensington from Frasers & Sekisui House. The portfolio contains over 1,000 beds and came at a price of $400,000 per bed ($400M). GIC already own student beds through Iglu.
The student accommodation market is heating up with several large institutions now investing in assets and operators across the market. Last year Dutch pension fund manager Bouwinvest joined APG and Chinese heavyweight ICBCI in investing $150 million in Scape Australia, with 3 assets currently being developed.
The next major play will be the $2.0B sale of the Campus Living platform which holds 40,000 beds across three countries. Campus Living is currently owned by a host of local superannuation heavyweights including REST, Hostplus and Catholic Super, with REST the largest shareholder. It appears that the front runners include Macquaire Capital & Greystar Partners and AMP Capital & Arlington.
In a deal which was foreshadowed back in January, PropertyLink's PEP partnership finally announced the acquisition of 50 Ann Street, Brisbane for $145M. The Asian-based investment manager CIMB-TrustCapital agreed to sell out after acquiring the building two years earlier for $131.8 million. PropertyLink will invest 25% of its capital alongside the Goldman Sachs sponsored PEP arrangement which previously acquired the Denison Portfolio.
Also this week we saw Aqualand acquiring more assets in North Sydney, picking up 146 Arthur Street. Aqualands' total spend in North Sydney over the past 12 months is now over $450m with 132 Arthur Street, 15 Blue Street and 61 Lavendar Streets also acquired.
Another land sale was announced this week with AMP Capital selling 130 ha at 240 Donnybrook Rd for $70M. AMP Capital originally acquired the 310 ha rural holding in 2006 in a JV with Folkestone. A rezoning to Business land was procured in 2010. Industrial demand for the region was low and the GFC compelled the JV to sell 144ha to the Federal Government following which AMP Capital dissolved the JV and proceeded to obtain a rezoning to residential for part of the balance of the land. Approx 60 ha of the land is zoned for residential with the balance remaining as business land. MAB Corporation who are active on the northern side of Donnybrook Rd acquired the 130ha parcel to extend their control over this strategic site in the north. Whilst on the face of it the price appears low at $530,000 / hectare compared to other recent deals at $1,000,000 / hectare, the site has substantial infrastructure contributions and a large portion of industrial land which is unlikely to yield an immediate return.
Scroll through the list below or head to Propel for further details.