This article is from the Australian Property Journal archive
GPT is looking to rebalance its portfolio towards industrial and logistics by selling its stake in Sydney’s landmark office, 1 Farrer Place.
GPT is selling its 25% interest which was last valued at $584.6 million as at 30 June 2020.
CEO Bob Johnston expects the offering will attract both domestic and offshore investors. The sale is subject to pre-emptive first right arrangements with co-owners and will likely kick off a bidding war between Dexus which owns 50% and Lendlease’s Australian Prime Property Fund with 25%. Although Dexus this week offloaded 60 Miller St in North Sydney for $273 million.
“Farrer Place is one of Australia’s most iconic office assets attracting high quality tenants. It is rare for opportunities of this quality to be offered to the market and we expect it will be well sought after by both domestic and offshore investors,”
Johnston said proceeds from the sale will be reinvested into new opportunities including the group’s logistics development pipeline.
GPT and APPF together acquired a 50% stake in office tower in December 2003 for $480 million from the Deutsche Office Trust.
The 1 Farrer Place complex consists of 84,900 sqm of office space comprising Governor Phillip tower, a 64 level office building, Governor Macquarie Tower, a 41 level office building Phillip Street Terraces, being five restored historic terraces and nine levels of basement car parking for over 654 cars.
GPT and its AREITs peers are reweighting their portfolios towards industrial and logistics to meet ongoing demand. The COVID-19 pandemic has accelerated the growth of ecommerce and online retailing.
The latest NAB Online Retail Sales Index recorded 0.9% growth in September following a 5.9% in August. In year-on-year terms, sales are up 62.7% compared to September last year.
Other institutional players are also making a play for the sector with Cushman & Wakefield research showing industrial transactions have outpaced offices for the first time in almost 10 years.
Last week Fife Capital and DHL paid $83m for Melbourne industrial site and last week Frasers Property Industrial and Altis paid over $300 million for western Sydney land. So far this year, notable industrial transactions include:
- CSR sold its Horsley Park facility for $84.3 million; Hastings Deering sold an industrial developmentland in Brisbane for $41.5 million, and Qube Holdings is in talk to sell its Moorebank Logistics Parkfor $2 billion;
- Dexus’ sale of six assets into its joint venture vehicle with GIC, the Dexus Australia Logistics Trust, for $270 million, and Charter Hall’s acquisition of the OIA Glass portfolio for $214.6 millionand the automotive logistics park in Minto from Qube for $207 million;
- Charter Hall also acquired four ALDI logistics properties in partnership with Allianz for $648 million, as well as the Winc national distribution centre in Erskine Park for $115 million;
- In August active player Logos paid $50 million for the former Woolworthsdistribution centre in Melbourne; acquired an Epping logistics assetwith an end value of $70 million, and bought distribution centres in Sydney and Logan City for $172 million from healthcare company Sigma, with the backing of the New South Wales government’s financial management and investment arm, TCorp;
- In the same month Centuria Industrial REIT snapped up Telstra’s data centre complex in south east Melbourne for $416.7 million;
- Global real estate investment manager DWS picked up a 50% stake in a Coorparoo chilled warehouse facility for a cool $152.5 million last month, while Singapore’s Mapletree Logistics Trust paid $21.25 million for a newly built warehouseleased to Decina Bathroomware in Inala.
