This article is from the Australian Property Journal archive
GPT Wholesale Office Fund confirmed it will exercise its pre-emptive rights to acquire the remaining half-share in the 2 Southbank Boulevard office tower in Melbourne, with the $326.2 million price tag reflecting an initial yield of 4.8%.
It is the second major office deal struck this month on the eastern seaboard that saw a co-owner buying out its partner, after Dexus and its unlisted Dexus Wholesale Property Fund took on the balance of the 67-storey, MLC Centre in Sydney’s CBD from GPT in an $800 million deal.
The A-grade, 55,000 sqm Southbank Boulevard tower, at Freshwater Place, rises 38 towers on the edge of the city. A refurbishment of the building was completed last year, and around 23,000 sqm of leases have been signed across the 13 floors vacated by PwC in 2017. In addition, 11,000 sqm of tenants renewed their leases or expanded in the building, and its largest tenant, energy transmission company AusNet services renewed its lease until 2030.
New tenancy commitments include CUB, WPP, dairy company Saputo, contracting group Built, Microsoft and the GPT-owned flexible workspace provider Space&Co.
It has a WALE of almost six years and a commitment level of 98% by area.
“There is further leasing opportunity in the upper levels of the tower in 2020, and the Fund expects to capitalise on the high levels of tenant demand and low vacancy rates to enhance returns to investors,” GWOF fund manager, Martin Ritchie said.
The tower has a 6 Star Green Star Performance rating and 4.5 Star NABERS Rating, with solar panels for water heating, and installation of LED lighting and daily monitoring of energy and water consumption recently introduced.
GWOF is targeting net zero carbon emission across its assets by the end of 2020.
Frasers Property Australia general manager, investment property Chamoun Malki said the asset has been a consistent performer within the group’s portfolio and offers highly attractive investment characteristics. Frasers Property – then Australand – developed the building in 2005 and had retained a 50% ownership interest since.
CBRE and JLL handled negotiations alongside Frasers Property.
Recent research from Cushman & Wakefield shows Melbourne office values have doubled in the last five years.
Last week, Dexus moved to take on a half share of the MLC Centre at 19-29 Martin Place within GPT beginning a formal marketing campaign.
The A-grade tower has 66,900 sqm of office space across 57 floors, 10,600 sqm of retail space and 308 parking spaces. That transaction came in at a cap rate of just above 4.5%.
Australian Property Journal
