This article is from the Australian Property Journal archive
HONG Kong-listed Link REIT has shown its confidence in CBD offices in a $1.131 billion deal with Oxford Properties that will see it invest in the Investa Gateway Office (IGO) venture, which has a portfolio of five prime grade towers in Sydney and Melbourne.
Canadian group Oxford took over Investa Office Fund over three years ago and its local partner is Investa. Link REIT will take a 49.9% stake in IGO and sit alongside Oxford as keystone investor. The equity value of its stake is $596 million.
IGO’s $2.3 billion portfolio includes 126 Phillip Street, 388 George Street, 151 Clarence Street and 347 Kent Street in Sydney and 567 Collins Street, Melbourne.
“IGO is one of the highest quality Australian office real estate portfolios to be offered to the market in recent years. We are delighted to partner with two firms that have deep conviction and connections in the Australian market and further strengthen Link’s presence in the country,” George Hongchoy, CEO, Link said.
“The Australian economy has been highly resilient and the investment in one of its highest quality prime office portfolios provides immediate scale, positions us strongly for the next cycle and aligns with our Vision 2025 growth strategy of diversifying and improving our portfolio mix in the region.”
Greg Hyland, Stuart McCann and Flint Davidson from CBRE advised on the transaction.
Link REIT – whose local asset manager and strategy services provider is EG – recently spent $538 million buying a 50% interest in trophy Sydney retail assets the Queen Victoria Building, The Strand Arcade and The Galeries, while in 2020 it completed its $683 million acquisition of the 100 Market Street office tower above Westfield in the Sydney CBD.
It secured a major recruiting coup to start the new year with the appointment of Charter Hall Retail REIT CEO Greg Chubb as chief operating officer – international.
Major investments in city towers have shown there is still confidence in CBD offices despite two years of many desks sitting idle. Dexus closed 2021 with $555 million of office deals as part of a $1.5 billion selldown, and Blackstone took a half share in Sydney’s Grosvenor Place for $925 million.
Alex Harper, Oxford Properties head of Australia, said Oxford will redeploy capital from the transaction into its prime office develop-to-core pipeline and build-to-rent develop-to-core investment strategy in Australia.
The build-to-rent initiative includes a newly unveiled Melbourne city fringe tower, as well as a $450 million build-to-rent project in Melbourne’s Footscray, and the Pitt Street over-station development in Sydney’s CBD.
“Following on from the recent investment by Mitsubishi Estate into our Parkline Place project, today’s transaction further demonstrates the continued global institutional demand for prime and highly sustainable office product.”
Parkline Place is the sister tower of the Pitt Street development, which will rise 39 storeys and have 47,800 sqm of office space.
