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Weekly Transaction Update - 3rd May


This week we recorded 16 major transactions worth $1.12bn

Mapletree acquire 111 Pacific Highway

The break up of the commercial assets held by Investa (now Oxford) continues with the announcement that Singapores' Mapletree Investments will acquire 111 Pacific Highway, North Sydney for $275.0M.

The A Grade, 24-level building contains 18,668sqm of commercial space and 164 car spaces. According to the June 2018 Investa reports, the building at that time had a WALE of 2.8 yrs generating $10.8M in annual rental income. The external valuation in June was $236M based on a 6% cap rate.

The transaction to Mapletree equates to a rate of $14,731 per square and is expected to be based on a passing yield of under 5%.

The Singaporean group has a strong appetite for city fringe and suburban offices and in October 2018 acquired 67 Albert St Chatswood for $158M and prior to that in 2017 also acquired a $145m office tower at 417 St Kilda Road from an unlisted trust run by Newmark Capital.

For Oxford, the break up of the assets continues with 99 Walker Street North Sydney, and 5 Brisbane assets on the chopping block including; 140 Creek Street, 295 Ann Street, 232 Adelaide Street, 239 George Street and 15 Adelaide Street.

Mirvac have already taken up their 50% interest in 20 Bond Street from Investa following a pre-emptive right process which nominated Morgan Stanley to become a co-owner at a price of $310M.

 

310 Ann Street Fix and Flip

Cornerstone Properties appear to have succeeded in their fix and flip strategy with a client of UBS Asset Management expected to acquire 310 Ann Street Brisbane for approx $220 million.

The tower, at 310 Ann Street, was overhauled by Cornerstone Properties after it bought the building with JV partner FA Pidgeon & Son for $63m in 2012.

At that time, Suncorp fully occupied the building but vacated in 2015, leaving an opportunity to create a more contemporary product for the current market.

Cornerstore Properties appointed Hutchinson to strip back the building to its skeleton, and completely redefine the asset at a cost of circa $60m. Works included expanded floors plates (from 970sqm to 1,147sqm), new ceiling heights, new floor-to-ceiling glass facade, new amenities, a new 13-metre-high foyer, new streetscape and awnings.

Cornerstone Properties secured new tenants including Allianz Worldwide Partners and the Queensland government.

If the sale progresses at $220m, the $60m investment will certainly have paid off well.

JLL and CBRE were appointed to market the building.

 

Fortius & Blackrock trade 201 Charlotte St Brisbane

Fortius Funds Management and BlackRock-have secured a buyer for their 16-storey CBD tower at 201 Charlotte Street Brisbane.

The property has been acquired by Kyko Group for $126.7 million, reflecting a 5.94% initial yield.

The A-grade office tower sits on a 1,839sq m site, providing 13,291sq m of net lettable area.

The building was previous acquired by Fortius and Blackrock for $81.5 million in 2015 with a further $5M spent on a recent refurbishments, which has established 201 Charlotte Street as a lifestyle hub, offering childcare facilities, an F45 gym, café, end of trip facilities and a valet car service.