This article is from the Australian Property Journal archive
THE flagship $2 billion plus Investa Commercial Property Fund has bought 259 Queen St in Brisbane for $173 million on a passing yield of 8.5% from the Duke of Westminster's property company, Grosvenor Group.
This acquisition will boost ICPF’s total assets under management to over $2.1 billion.
The sale is part of Grosvenor’s strategy to monetise its property investments in Australia after unsuccessfully attempting to spin its portfolio into a real estate fund. Jones Lang LaSalle has represented Grosvenor in a number of the deals.
In March Grosvenor sold its half stake in 400 George St Brisbane to South Australia’s Motor Accident Commission for $198.5 million.
In total Grosvenor has sold approximately more than $620 million worth of properties in the last 18 months, including Eclipse Tower in Parramatta to the REST Industry Super fund for $167.5 million and Sir Joseph Banks Corporate Park to Dexus Property Group for $76.8 million.
Grosvenor’s group investment director Chris Taite outlined a new strategy for the company.
“We are looking forward to re-investing in Australia indirectly with specialist third parties,” he announced.
ICPF fund manager Peter Menegazzo said 259 Queen St is a property with sound fundamentals located in a prime location adjacent to the GPO.
“We plan to further enhance building amenity with the immediate installation of new end of trip facilities and refurbishment of the entry foyer. We are confident that these improvements, combined with the building’s inherent quality and locational appeal will attract quality tenants, despite competitive leasing market conditions,” he added.
Menegazzo said that while planned new developments will add to the Brisbane CBD supply pipeline in the near term, the favourable expiry profile of 259 Queen St means it will likely be fully leased up prior to the completion of these projects. The building has already been shortlisted by a number of high profile users.
The acquisition follows an active period for ICPF, which has grown significantly since 2009 following a $700 million capital raising.
In February this year ICPF and its sister fund, the ASX-listed Investa Office Fund, bought equal stakes in 567 Collins St Melbourne from Leighton Properties for $231 million. Prior to this, ICPF bought and increased its interest 126 Phillip St Sydney; 120 Collins St Melbourne and 400 George St Sydney.
At the same time the fund has divested a number of non-core assets including 231 Elizabeth St, Sydney.
“This acquisition diversifies our portfolio in a new part of the Brisbane market and complements our holdings in Sydney and Melbourne.
“Going forward, we will continue to enhance value across the portfolio through active investment and a continued focus on identified strategic priorities, including the sale of Kings Row in Milton,” Menegazzo said.
Situated in the Brisbane CBD ‘Golden Triangle’, the 16-level building comprises 24,789 sqm of net lettable area. It is currently 98.8% occupied and the building has large 1,500 sqm – 1,600 sqm floor plates, 142 car parking spaces and a 4.5 star NABERS Energy rating.
Completed in 2004, key tenants include Bank of Queensland and the Commonwealth and Queensland State Governments.
Property Review
