This article is from the Australian Property Journal archive
MELBOURNE’S GPO building is one of five landmark assets across the country tipped to the market by property fund manager ISPT, which is hoping for as much as $600 million from the divestment play that follows a strategic review of its Core Fund and heralds a shift away from the office and retail sectors towards industrial, health and life sciences.
The assets include four retail properties – the GPO building, The Strand Melbourne, Halls Head Central WA and Eastgate Bondi Junction – and the vacant office building at 270 Pitt Street, the latter billed as a “unique re-positioning opportunity in Sydney’s CBD”.
“The fund’s portfolio curation strategy will see the five assets put up for sale having been identified as not aligning with the desired scale or sector allocation goals of the fund.” ISPT said.
“The proceeds generated from these disposals will be predominantly reinvested into the fund’s existing development pipeline in the high conviction sectors of industrial and health and life sciences.”
Matthew Brown, head of funds management, ISPT, said, “The real estate landscape is rapidly evolving, and by divesting tactical assets and re-calibrating our existing sector exposures to create a diversified portfolio we can optimise returns for our investors”.
The $17.7 billion ISPT Core Fund is invested in over 80 property assets across various sectors, including retail, office, industrial, education, health and life sciences, and is Australia’s largest wholesale property fund.
Melbourne’s GPO building is on a 3,856 sqm leasehold site at the busy intersection of Bourke Street Mall and Elizabeth Street, and is home to Australia’s largest H&M flagship store, secured on a renewed 10-year lease through to March 2034
The site was infamously valued at $1 in 2019 in a Victorian Civil and Administrative Tribunal in favour of ISPT, which argued that the site’s heritage status meant it could not be redeveloped to a better use – thus saving it $650,000 in annual land tax. ISPT’s success at exploiting the loophole saw the state government to amend the Valuation of Land Act 1960 to remove references to heritage buildings.
Simon Rooney and James Douglas from CBRE, together with Lachlan MacGillivray from Colliers, will be marketing the Melbourne GPO building.
$180m for Melbourne assets
Also on the block in Melbourne is The Strand, which occupies two prime corners within one of Australia’s most prominent CBD retail precincts, and is surrounded by some of the city’s most iconic laneways and arcades. It is one of the most well-connected and highly exposed retail sites in Melbourne with direct access to Emporium Melbourne and the GPO, and is tenanted by fashion and lifestyle retailers, and has with a two-level parking facility for 173 vehicles.
Rooney, Douglas and MacGillivray also have this listing, with around $180 million expected for the Melbourne assets.
Eastgate Bondi Junction in Sydney’s eastern suburbs hit the market for the first time in 30 years. The convenience-focused sub-regional shopping centre has 15,000 sqm of gross floor area and is anchored by Coles, ALDI, Kmart, and Dan Murphy’s, Centre moving annual turnover is 56% above Urbis averages, with specialty sales productivity of $12,512 per sqm.
The centre also has parking for 887 vehicles.
Nick Willis, Sam Hatcher and Kate Low from JLL, and Justin Dowers, Carl Molony and Philip Gartland from Stonebridge are marketing Eastgate Bondi Junction.
Rooney and Douglas are also marketing Halls Head Central, 76 kilometres south west of the Perth CBD. The convenience-based centre has Kmart, Coles, ALDI and 46 specialty shops with a gross lettable are of 19,540 sqm. Specialty sales productivity is well over $9,000 per sqm.
Meanwhile, the 270 Pitt Street building is up for grabs for the first time in over 20 years and presents a “major DA approved repositioning opportunity / brown to green strategy” opportunity, according to ISPT.
Adjacent to the new metro station scheduled to open early next year 2024, the 22,662 sqm building has 48 car spaces and side core floors of circa 950 sqm that are easily subdividable.
Flint Davidson, James Parry and Michael Andrews from CBRE, and Ben Schubert, Paul Roberts and Jonathan Vaughan from Knight Frank.
The properties have come to market at a time of major gaps in the expectations between buyers and sellers. In a recent APJ Talking Property podcast, MSCI Pacific head of real estate research Benjamin Martin-Henry discussed transaction volumes hitting the lowest level since 2011 with sales of industrial, office and retail assets all slumping in the first half.
