Weekly Transaction Update - 6th July
This week we recorded 30 major transactions worth $935M.
The largest deal this week was the acquisition by JP Morgan of 53 Albert Street, Brisbane for $250M. The 18,000sqm building was developed in 2010 above an existing 580 space 9 storey car park which was a novel approach to the site. Upon completion, the building was fully tenanted to the QLD State Government. Challenger acquired the building in 2014 for $209M with a new lease in place to the State Government until 2022 but with the obligation to fund the outstanding rental incentives of $25M. The building was acquired this week by JP Morgan on 6.4% yield or $13,889/sqm.
Also this week, EG Funds Management sold its 277 William Street, Melbourne asset for $93.88M having paid $49.5M for it in 2015 on a yield of 7.5%. The purchaser, KHI Holdings acquired the fully leased 12,080sqm building on a yield of 4.7%, reflecting the current strength of the Melbourne commercial market.
Charter Hall's Prime Industrial Fund along with its Core Logistics Partnership have acquired a Coles Distribution facility in Smeaton Grange from Frasers for $90M. The 16.7ha site contains a 61,281sqm warehouse and was acquired on a yield of 6.4%. The sale price was 40% above Frasers' book value of $64.5M and above their latest valuation of $85M. Coles recently agreed to a 5 year lease extension to 2023 and Charter Hall have it valued at $93M.
According to the LPI, Meriton's settled on the acquisition at 811 Elizabeth Street Zetland, currently occupied by Ford, for $85.0M. The site obtained a planning approval through the Land & Environment Court in August 2017 for the demolition of all existing buildings and a concept mixed use proposal for future subdivision and building envelopes, including a 2 storey podium containing car parking, and 3 residential towers of 15, 7 and 6 storeys across the site. The site was held by AMHA who bought the property from Daimler Chrysler Australia/Pacific for $15.956 million in 2006.
* indicates unconfirmed price or apportionment of a portfolio sale