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Weekly Transaction Update - 21st December 2018

This week we recorded 22 major transactions worth $1.36bn

PGIM sells 25% of Coca Cola Place

PGIM Real Estate have confirmed that it is selling a 25% stake in 40 Mount Street North Sydney to M&G Investments for $109.5M.

PGIM are acting for the South Korea’s National Pension Service who holds a 50% interest in the building alongside Investa's Commercial Property Fund. It is unclear whether PGIM are trading the remaining 25% held by the Pension fund. ICPF hold pre-emptives over the PGIM share and have likely been instrumental in introducing M&G Investments who are already co-investors with ICPF in 400 George St.

The South Korean Pension Service bought its interest in the North Sydney tower stake from Investa for about $113.5m in 2011, effectively doubling its value in 7 years.

Spanning 28,500sq m over 21 floors, the tower houses Coca-Cola Amatil and a mix of quality private sector tenants including Goodman Fielder and Vodaphone.

M&G Real Estate, a unit of British insurer Prudential PLC emerged as a major purchaser of Australian commercial assets in 2006 and has also teamed and Mirvac Group with a 50% interest in the $800m office tower that it is proposed Suncorp will occupy in Brisbane’s CBD.

M&G made its first Brisbane acquisition with the $119.1m purchase of HQ South in Fortitude Valley last year and in December 2016, the firm bought the Casey Centre, in Melbourne, from Scentre Group for more than $220m.

The North Sydney sale is being handled by JLL and Savills.


Cromwell buys in Townsville

Cromwell Property Group has purchased the Energy Queensland headquarters in Townsville in north Queensland for around $63.5 million.

The building at "420 Flinders Street, accommodates 500 employees and was constructed as part of the CBD Revitalisation Program in 2013. by the Lancini Group. It has ground floor retail space and more than 7,000 square metres of office space.

The property is leased to Energy Queensland and the National Australia Bank with a 9.3yrs weighted average lease expiry. The acquisition will show a 7.3% initial yield.Cromwell will house the asset in its Direct Property Fund, a fund for retail investors which produced a 9.8% total return in the year to March 2018. The fund has 8 other investments..


Charter Hall Pick UP Campbellfield Plaza

Charter Hall Retail REIT have acquired Campbellfield Plaza in Melbourne’s northern suburbs from ISPT for a total consideration of $74 million. The transaction reflects a fully let yield of 6.5%.

The Centre is located on a 58,600sqm site on the corner of Sydney Road and Mahoney’s Road, Campbellfield, approximately 14 kilometres north of the Melbourne CBD. The Centre was originally constructed in 1983 and acquired by ISPT in 1995 before an expansion in 2004. The Centre has low site coverage of just 17,900sqm offering further redevelopment potential.

The Centre's WALE is 8.4 yrs (by GLA) and generates approx $4.6M in net income. The Centre's anchor tenants include one of Victoria’s strongest performing Kmart stores, Coles, a latest format ALDI, and Officeworks. The Centre has an MAT of approx $112M.

The major anchor tenants are either currently paying or are expected to pay percentage rent within the initial investment horizon or are under fixed rental increases. The Centre also comprises 19 specialty tenants and at grade car parking for over 800 cars.

The purchase will be funded from the sale proceeds of Charter Halls recent disposal at Coomera, Qld and Young, NSW.