This article is from the Australian Property Journal archive
AFTER a hefty repositioning and re-leasing program, Singapore-backed Frasers Property Australia has offered a 50% stake in its $750 million office tower at 2 Southbank Boulevard in Melbourne, which features a tenancy profile boasting heavy hitters such as Apple, CUB, WPP and Kraft Heinz.
The A-grade 55,000 sqm tower at Freshwater Place, on the edge of the city, rises 38 storeys above eight podium levels and is co-owned by the GPT Wholesale Office Fund. GPT has just put a 50% share of the MLC Centre in Sydney’s CBD to the market that could fetch more than $800 million.
Frasers Property – then Australand – developed 2 Southbank Boulevard in 2005 and has retained its half-share since.
Ongoing refinement has seen the tower achieve a 6 Star Green Star Performance rating – one of only six buildings in Australia to do so – and it is also accredited with a 5.5 Star NABERS building energy rating (with green power), or 4.5 Star NABERS energy rating without.
The recent overhaul of the building encompassed 22,000 sqm of office space, and the asset is being offered with 98% occupancy by area and a weighted average lease expiry of almost six years.
“This asset has been a great and consistent performer within our portfolio,” chief executive officer of Frasers Property Australia, Rod Fehring said. “Frasers Property is divesting of its interest in this asset as part of our ongoing capital management program.”
The offering comes as latest research from Cushman & Wakefield shows Melbourne office values have doubled in the last five years.
Cushman & Wakefield national director of research Tony Crabb said the growth has driven by a combination of higher rents and stronger yields, which has seen capital values for CBD office buildings increase between 90% and 140%.
The research shows capital values for A grade buildings skyrocketed from $6,200 per sqm to $11,700 per sqm and B grade jumped from $3,800 to $9,100 per sqm.
Crabb said 2018 may be regarded as a strong year for transactions with new records set in a number of benchmarks.
“Whilst gains from yields may be expected to play a smaller role in the future, lower vacancy and higher income in properties should continue to see values rise in a number of key markets,” he said.
JLL and CBRE are the conjunctional marketing agents for 2 Southbank Boulevard.
Australian Property Journal
