This article is from the Australian Property Journal archive
INVESTA has sold its stake in a Sydney office tower to one of its co-owners, M&G Real Estate, above book value for $300 million in a sale that offers optimism for the market heading into 2021.
M&G Real Estate now holds a 50% share in 400 George St, while China Investment Corporation owns the other half through its fund manager Mirvac.
The newly traded stake was held by the unlisted Investa Commercial Property Fund and has been last valued at $276.3 million. The fund has been reported to be planning the divestment of $900 million worth of Sydney CBD office holdings, including 1 Market St and 135 King St.
Sublease space in Sydney has soared to its highest level since 1992, and despite the easing of restrictions throughout the year, Property Council figures this month – released before the December 14 date given by the state government for workers to return to their desks – showed less than half of Sydney workers have returned to their offices. While the imminent holiday period is expected to have drawn out the process, the cluster of COVID-19 cases in the Northern Beaches has served as a reminder of the fragility of the pandemic situation.
The acquisition comes as Singapore’s Peakstone settled on its $530 million acquisition of the A-grade CBD office tower at 45 Clarence St. Peakstone shirked early concerns over the pandemic’s impact on the market, and agreed to purchase the tower above book value in July from Dexus.
Dexus, meanwhile, revealed last week its office portfolio had held its value, and its weighted average capitalisation rate firmed slightly. Despite escalating trade tensions between Canberra and Beijing, and the uncertainty due to the pandemic, Dexus has just offloaded a $925 million half-share of the landmark Grosvenor Place tower to China Investment Corporation in one of the largest office deals of 2020.
Hot on the heels of that deal was the Lendlease-managed Australian Prime Property Fund Commercial acquiring GPT’s 25% interest in 1 Farrer Place at the book value of $584.6 million, while Charter Hall Long Wale REIT picked up 76-78 Pitt St in a $281.5 million sale and leaseback deal with Telstra.
