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Weekly Transaction Update - 16th June


Another significant week this week with 13 assets changing hands valued at over $1.2B.

The largest deal was the sale by Mirvac, pre-selling two Melbourne Development projects at a combined value of $560M and on a sub 5% yield.

The first of these is 477 Collins Street (known as "Olderfleet") which will be acquired by ARA Asset Management for $460M. Olderfleet has just commenced construction and will be one of Mirvac’s largest commercial developments in Australia. The project is due for completion in 2020 and will comprise 58,000 square metres of premium office and retail space with Deloitte as the anchor tenant. The building is design to achieve a 5 Star Green Star rating, a 5 Star NABERS energy rating and a Platinum WELL certification.

The second property on Mirvac list is 664 Collin Street which wil lbe acquired by Morgan Stanley Real Estate for $140M, reflecting a yield of 5.0%. The 26,000sqm building has been 60% pre-committed to by Pitcher Partners and Exxon Mobile.

For both these projects, Mirvac will likely provide 5 year rental guarantees over any vacant space however at a 5% yield, the cost of these is relatively easily absorbed.

Also this week we saw an extraordinary price paid for a site in St Leonards with developer Dyldam selling a 4,500sqm site to JQZ for $300M. The site is zoned for a residential development containing approximately 777 apartments. The purchase price therefore equates to $386,000 per apartment. JQZ has a residential development pipeline of $3.5B spread across 16 projects in Sydney. At $300M, this deal is the 4th largest residential development transaction in the past 3 years with the largest being the $380M paid by Greenland and GoldenHorse for a Goodman site in Erskinville which is due to yield 1600 apartments.

Another large transaction this week was the sale of 628 Bourke Street by M&G Real Estate to AFIAA for $180M. The two investors came to the table last month with AFIAA selling to M&G their Fortitude Valley asset for $120M. AFIAA has a significant presence in Australia with the 11-storey Northbank Place East Tower at 525 Flinders Street, Melbourne, which was purchased for about $55 million from a Uniting Church entity in 2012, as well as the AusAid building in Canberra for about $55 million in late 2009. It also owns The Atrium complex in Pyrmont.

There were a number of other deals this week. Scroll through the list below or head to Propel for further details.