Weekly Transaction Update - 7th December 2018
This week we recorded 28 major transactions worth $1.0bn
AMP sells Crossroads for $140M
AMP Capital's Diversified Property Fund has agreed to sell the Crossroads homemaker centre to Ashe Morgan for $140M. The deal reflects a fully leased yield of more than 7 per cent with a passing yield of about 6.75 per cent.
The 14.35ha site is situated in the Sydney metropolitan suburb of Casula within the southwestern growth corridor of Sydney. The Centre has good access off the M4 and M7 motorways. The trade area of the Centre currently contains approx 1 million people and with the significant infrastructure investment in the region, it is expected that strong population growth will continue.
The 48,400-square-metre large-format retail centre is home to 28 retailers, including anchor tenants Bunnings, The Good Guys, Freedom, Nick Scali and Fantastic Furniture. A Costco wholesale supermarket is located adjacent to the asset.
King Street Wharf Sells for $125M
It has been confirmed that property investment group Markham has bought the King Street Wharf restaurant precinct on Sydney's Darling Harbour for $125.5 million from real estate investment manager LaSalle Investment Management on a yield of 6.02%.
The asset spans 5,651sqm of retail space and feature 14 restaurants and eateries including Cargo Bar, Bungalow 8 and Meat District Co. The 14 tenants are all on long-term leases, with a weighted average lease expiry of more than 11 years.
Interest in significant food & beverage venues is strong with Lend Leases Exchange venue in Darling Square expected to be sold to a Chinese investor on a yield of circa 4%. The property is fully-leased with pre-commitments to about 12 retailers as well as the City of Sydney, the Commonwealth Bank of Australia and the operators of Chinese restaurant Golden Century.
PGIM Real Estate to sell 595 Collins Street
Interests associated with a Hong Kong group have emerged as the prospective buyer for PGIM Real Estate tower at 595 Collins Street. The tower, which is held by PGIM (previously known as Pramerica) on behalf of the Koren National Pension Service is expected to sell for about $315M with a yield of circa 5%.
According to agents, the building is 96% leased generating about $15M pa.
The South Korean fund bought the Melbourne complex in 2011, taking a 90 per cent stake in 595 Collins Street from Investa and a fund it ran, in a deal valuing the whole asset at about $130m until in 2015, PGIM took full control. The original deal was reported as reflecting an 8% yield.
The 17-storey building, which sits on a near 4,000sqm site, was completed in 1984 and has 31,778sqm of space made up of two interconnected office towers, three ground-floor shops and 145 basement car spaces. In 2007, the building had a major refurbishment.
The group are also selling its half stake in 40 Mount Street, the prominent A-Grade office building in North Sydney known as Coca Cola Place.
Deka Immobilien most of Bvlgari building
Deka Immobilien have acquired the Bvlgari building at 62 Castlereagh Street (well most of it). THe group have paid $58M for Lots 4,5,34,35 and 50 which comprise about 950sq m of space in the building, all of which is leased under a long-term lease to the luxury brand. The space is divided between three floors, with the recently modernised ground floor and first lower level being used for retail and the first floor for offices.
The Bvlgari property was sold by Spain’s Allegra European Holdings, which has benefited from a dramatic overhaul of the flagship Sydney store on Castlereagh Street after picking up the building from JPMorgan Asset Management for $29m two years ago.
Real Asset Management acquire Burwood building
Real Asset Management have acquired a property in Elsie St Burwood for $49.0M. The 1588sq m site traded on a tight yield of 6 per cent, reflecting its position in the heart of Burwood.
The tower has 6400sq m of lettable office accommodation, which is fully occupied by the NSW government’s Department of Transport. The department has agreed to extend the lease to 2023 with an option to extend it for a further three years to 2026.
The building on Elsie Street was sold by investment group Atlas Property Holdings, which also developed apartments on another part of the site.
Blackstone pick up two more Industrial Assets
Blackstone have picked up two new industrial assets in Sydney and Melbourne as they continue to expand their industrial footprint in Australia. The private equity group have paid $33M for the two assets on a blended yield below 6.0%.
The Blacktown property at 46 Bessemer Street comprises a 10,220 square metre building on 32,268 square metres of land. The property is leased to Valspar, the paint and coatings manufacturer that was purchased earlier this year by Sherwin-Williams for $US9.3 billion. The lease has three years remaining of a 12-year term, at a passing net rental of $1.255 million net annually. According to the LPI, the asset was sold for $21.5M representing a yield of 5.8%.
The Melbourne property at 323-325 St Albans Road in Sunshine North is on a 4.5 ha site and contains more than 10,000 square metres of warehouses. The property is leased to Bluescope with a remaining lease term of 6.3 years at a current net rental of $773,214 per annum. The property is believed to have sold for $11.5M, on a 6.7% yield.
Centruia Industrial Announce Acquisitions
Centuria Industrial REIT, has acquired two industrial assets for a combined value of $54.4 million and announced an underwritten accelerated non-renounceable entitlement offer to raise approximately $51.0 million to partially fund the acquisitions.
The two assets are; 149 Kerry Road, Archerfield QLD , and 155 Lakes Road and 103 Stirling Crescent, Hazelmere
149 Kerry Road, Archerfield is 100% leased to Bluescope Steel Limited and has a low site coverage ratio of 31% providing flexibility to accommodate current and or future tenant requirements. The property has a 6.1yr WALE. The property is located with good access to infrastructure connections including the Acacia Ridge Rail Terminal. The site was purchased for $30.6M from the related Centuria Metropolitan REIT as part of the on market process at a 6.0% cap rate.
155 Lakes Road and 103 Stirling Crescent, Hazelmere is an industrial unit estate comprising two freehold titles, with a low site coverage ratio of 17%. The property is considered strategic for both of its tenants, which are subsidiaries of blue-chip ASX-listed tenants. The WALE is 1.6yrs. The property is a unique metropolitan site with road train access and is well located in close proximity to key infrastructure including the Perth Airport. The asset was acquired for $23.8M on a 6.75% cap rate.
Review our other transaction data at ReSourceData.
* indicates unconfirmed price or apportionment of a portfolio sale