This article is from the Australian Property Journal archive
MIRVAC has sold off a 50% interest in its 664 Collins Street development in Melbourne’s CBD to Morgan Stanley Real Estate’s Prime Property Fund Asia for $138 million.
The transaction was struck at a tight 4.97% yield, and a tighter result is tipped for Mirvac’s sale of another half-stake in a key Melbourne CBD asset.
The 664 Collins Street project, above busy Southern Cross Station in the CBD’s west end, will comprise 26,000sqm of A-grade office space across nine levels, with floor plates of more than 3,100sqm.
It is currently 62% pre-leased, with accounting firm Pitcher Partners having committed to more than 9,000sqm, global oil and gas giant ExxonMobil to 7,100sqm, and the remainder under heads of agreement.
The deal is the second major central Melbourne transaction in the past week, following Singapore’s Keppel REIT buying a 50% stake in the future Victorian Police headquarters development at 311 Spencer Street from Australia Post for $347.8 million.
Prime Property Fund Asia will contribute 50% of the total development at 664 Collins Street costs, and Mirvac development management and ongoing property and investment management services. Mirvac will provide a five-year rental guarantee on any unlet office or retail space from completion, expected in the 2018 financial year.
Last year, the fund acquired One Shelley Street in Sydney a joint venture with Charter Hall for $525 million.
Designed by Grimshaw Architects, 664 Collins Street development is targeting a 5 Star Green Star Design and 5 Star NABERS Energy rating.
“We are delighted to partner with MSREI at 664 Collins Street in Melbourne, which represents a key piece of the redevelopment over Southern Cross Station, and follows our successful 669 Bourke Street office development nearby,” Mirvac’s CEO Susan Lloyd-Hurwitz said.
Mirvac is also believed to be close to agreeing to sale terms for a half-share in the Olderfleet building site at 477 Collins Street, to another Singaporean fund manager in ARA Asset Management. The widely speculated circa-$420 million price tag would reflect a 4.75% yield.
Deloitte has been secured as anchor tenant over 22,000sqm of the office tower, which is slated for completion in the middle 2020.
Australian Property Journal
