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Weekly Transaction Update - 15th February 2019

February 15, 2019

This week we recorded 20 major transactions worth $274M

 

Oxford sell first Asset to Corval

 

Oxford Real Estate have commenced the sell down process of several of their non core holdings following their successful take over of the Investa platform.

 

First off the ranks is 66 St George's Terrace, Perth which is to be sold to Corval for $72m. The property is located on the north side of St Georges Terrace between William and Barrack Streets.

 

The 11 level A-grade office building comprises 11,444 square metres of space which is leased to Subsea, Manpower, Dimension Data and AustralianSuper. The building was refurbished in 2016 with a complete foyer upgrade, life upgrades and new End-of-Trip faciliites including secure bike parking, showers and lockers.

 

The asset was previously held by Investa at a book value of $66m, realising a gain for the fund on disposal.

 

Corval have previously held 2 investments in Perth;

  • Workzone East which they acquired in December 2016 for $68.25m and continue to hold and

  • 80 Sterling Street Perth which they acquired in June 2013 for $72m and then disposed in November 2016 for just $35m.

Charter Hall aims for Chifley Tower

 

Charter Halls' Prime Office Fund settled on the freehold title acquisition of GICs Chifley Tower for $98.5M after exchanging the deal in mid December with the private vendors, Chifley Freehold Limited.

 

With the freehold title in Charter Hall's hands the prospect of Charter Hall acquiring a slice of the leasehold interest in Chifley Tower has become more likely.

 

GIC bought the leasehold interests in Chifley Tower jointly with Morgan Stanley Real Estate Investing (MSREI) in 2005 for about $710m. GIC has since bought out MSREI to become sole owner of the building.

 

In late 2018, GIC offered a 50% leasehold interest in the tower however they failed to achieve the $900M they had hoped for citing "increasing uncertainty in the macro environment and the general real estate market". The leasehold interest has a 94.6yrs remaining term however the market may well have been concerned about other terms in the leasehold interest.  

 

GIC and Charter Hall have an existing relationship with GIC mandating Charter Hall to acquire several office towers in Brisbane worth close to half a billion dollars. So with the freehold interest in Charter Halls hand, the prospects for Charter Hall being the successful party on the leasehold interests are much higher.

 

Charter Hall also own an adjoining leasehold interest at 167 Macquarie Street which could be redeveloped to incorporate the Chifley retail precinct which performs well as a food court, but has limited other retail uses.

Review our other transaction data at ReSourceData.

 

    * indicates unconfirmed price or apportionment of a portfolio sale

 

 

 

 

 

 

 

 

 

 

 

 

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