Exchange Tower Perth sells for $326M
GIC are extending their counter cyclical investment program focus on Perth & Brisbane with support for the acquisition of Exchange Tower from Primewest and AMP Capital Wholesale Office Fund. GIC will enter the transaction via a new Primewest Counter Cylical Office Fund in the largest Perth office deal of 2018.
Primewest picked up a half-share in the building in March 2016 from Colonial in a deal valuing the entire complex at $227m. At the time more than a third of the 34,479sq m building lay vacant.
AMP Capital held a pre-emptive opportunity to pick up 100% of the asset from the Colonial syndicate but couldn't get to the purchase price in what at the time was a deteriorating market.
The joint owners invested some capital to upgrade the asset and slashed vacancy from 37.6 per cent to 19.8 per cent in the first six months and then to under 12 per cent.
The sale to GIC reflects a 6.25% cap rate proving Primewest with a $49.5M profit in 2 years (less capex & incentive costs).
GIC's counter cyclical program also supported Primewest's acquisition of 1 William Street, Perth in October 2017 for $175M and earlier this year GIC acquired 343 Albert Street for $108M and 32 Turbott Street, Brisbane for $370m with Charter Hall.