This article is from the Australian Property Journal archive
MELBOURNE developer Clement Lee has sold a 70% stake in Melbourne's World Trade Centre to Abacus Property Group and global private equity firm KKR for $120.4 million on a 9.3% yield.
The joint venture partners will acquire a 70% interest in Towers 2, 3 and 4 from Clement Lee’s Asset 1 WTC, which will retain a 30% co-ownership interest.
Originally completed in 1983, the WTC complex was originally completed consists of four interconnected office buildings and was temporarily home to Crown Casino. Developers Clement Lee and Luke Adams bought the entire complex in 2005 from Macquarie Bank for $112 million.
Later that year they carved up the first tower, leased to Victoria Police, and sold it to SAITeysMcMahon for $71 million.
Towers 2, 3 and 4 provides approximately 50,000 sqm of net lettable area including 43,500 sqm of office and 4,600 sqm of retail space, a 1,800 sqm childcare facility and 310-bay car park. It is approximately 90% occupied and has a weighted average lease expiry of over five years. Over 50% of the office component is leased to the Victorian government.
Under the terms of the venture, KKR will fund 75% of the equity and Abacus will fund the remaining 25% and Abacus will also manage the asset on behalf of the three owners.
This is KKR’s first real estate investment in Australia.
“We are very pleased to expand our real estate business to the Australian market. We look forward to working together with our partners, Abacus and Asset 1 WTC, to achieve our investment objectives on this uniquely placed asset in the Melbourne market,” KKR Asia’s real estate director Bryan Southergill said.
Abacus managing director Dr Frank Wolf said the group is extremely pleased to be announcing the formation of a new venture with KKR and Asset 1 WTC.
“Abacus’ business model is focused on pursuing stand out core-plus assets with value add characteristics. Aligning our company with KKR, an institutional partner with complimentary investment objectives, demonstrates the continued success of our third party capital strategy,” Wolf concluded.
Property Review
