This article is from the Australian Property Journal archive
INVESTA Office Fund has sold QBE House at 628 Bourke St in Melbourne's CBD for $129.6 million after recently lifting the occupancy rate to 100%.
The buyer is believed to be London-based M&G Real Estate, which is part of the M&G Group of Companies, the real estate investment arm of Prudential Plc.
M&G Real Estate is a top 25 global real estate investment manager. As at March 31, it had £248 billion of assets under management.
IOF’s fund manager Toby Phelps said the sale price will reflect a 12% premium to forecast book value. The reported cap rate is 7.25%.
“After stabilising the asset through an active leasing program, we’re taking advantage of strong capital market conditions to crystallise value creation and selling at a significant premium to book value.
“The transaction delivers on Investa’s commitment to improving risk adjusted returns across the portfolio and follows an intense period of asset management that included leasing over 18,000 sqm, increasing the weighted average lease expiry from 2.3 years to 6.8 years,” Phelps said.
Completed in 1989, the B-grade 15-level office building comprises a net lettable area of 24,872 sqm and had an occupancy rate of 81%. The existing tenants were QBE, V Line and Momentum Energy.
Last month IOF completed refurbishments of the floors and as a result, signed up four new tenants Little Real Estate (265 sqm), VIT (1,300 sqm), AAP (3,400 sqm) and ISCS (260 sqm), taking the occupancy rate to 100%.
Property Review
