Weekly Transaction Update - 29th September
This week we recorded 8 major transactions for a total value of $1.5B.
The most significant transaction was of course, the commitment by AMP Capital and UniSuper to acquire 49.9% of Wynyard Place off Brookfield. At an acquisition price of $898.2M, this values the project at $1.8B (or $26,800psm) The reported yield on the transaction is a very sharp 4.75%. Wynyard Place will comprise a 67,000sqm premium grade 27 level building above one of Sydney's busiest train stations. The project has been pre-committed to 45% by NAB who will relocate from AMP Capital's other asset at 255 George Street. Whilst we understand that Brookfield will provide a rental guarantee on the balance of the space, AMP will be keen to see the remaining 36,850sqm of space quickly leased as they will then have to lease up the 40,100sqm at 255 George Street as well as 55,000sqm in Quay Quarter.
Also this week, one of the most impressive deals done in recent times is the sale of 10 Spring Street to Lend Lease for $270.5M. On a yield of just 3.95%, Lend Lease have paid $19,948psm for the 13,886sqm B grade building which has 15% vacancy and a 2.3 year WALE. The Vendor, Centuria paid just $91.6M in 2013 which is likely to have delivered an IRR of close to 48% and resulted in Centuria taking a performance fee of $25M. Whilst Lend Lease will capitalise on the vacancy and short WALE to push rents higher, Lend Lease are also sizing up the site for a new development, as they own the adjacent building at 8 Spring Street as well as No 1 O'Connel.
In an even more impressive deal, Keystone sold 100 Wickham Steet, Fortitude Valley this week to Ascendas REIT, delivering an IRR of close to 61% for the 2 year period. Keystone acquired the 13,000sqm building off Fortius with a WALE of 2 years and with the prospect that its major tenant Queensland Health may move from the site, making the building more likely a redevelopment play. Keystone were however able to secure Queensland Health for a further 5 year term and flip the asset at an 8% yield to Ascendas REIT.
There were a number of other deals this week. Scroll through the list below or head to Propel for further details.
* indicates unconfirmed price