This article is from the Australian Property Journal archive
REAL estate funds manager EG has acquired a trio of Sydney and North Sydney office assets for $450 million for its Australian Core Enhanced Fund (EG ACE), which boasts a further half a billion dollars in investment firepower following backing from Dutch pension fund PGGM.
EG has acquired the Swiss Re portfolio which includes 32 Walker Street in North Sydney and 50% stake in 50 and 60 Carrington St in the CBD, comprising a total of 32,454 sqm of space. The portfolio is 93% leased with a WALE of 2.9 years.
It is believed that the North Sydney office tower changed hands for $109 million.
AMP Capital purchased the properties in 2017 on behalf of Swiss Re, after scoring the mandate.
The North Sydney office was acquired from Abacus in 2017 for a circa $75 million whilst the half interest in the 50 and 60 Carrington St buildings were purchased from Brookfield in 2018 in a deal worth about $500 million.
The assets are close to major transport nodes that will benefit from major public and private infrastructure investment, EG said, and were acquired as a value add proposition. The portfolio has a total 32,454 sqm of net lettable area and 93% occupancy, with a blended 2.9-year weighted average lease expiry.
“The portfolio fits well with the investment strategy to acquire well located assets where value can be added over time. We have high conviction in the precincts and the CBD office market over the long term,” said EG’s ACE fund manager, Michael Noblet.
“EG’s Australian Core Enhanced Fund currently has approximately $500 million of capital for further acquisitions, following a recent equity commitment into the fund from a leading European investor,” he said, referring to PGGM’s backing in April.
The open-ended diversified fund now has eight assets with a total value of about $700 million since its June 2019 launch. It is targeting office, industrial and retail property across the country with a repositioning mandate, and also recently picked up a multi-let south east Brisbane industrial estate for $32 million.
Across its platform, EG added an inner Melbourne office building to its Yield Plus Infrastructure No. 2 Fund following a $27.3 million deal, and picked up a pair of Sydney Olympic Park office buildings for its new Urban Regeneration Joint Venture fund in a $66 million deal with Growthpoint.
It has also confirmed an agreement with Link REIT that will see it provide asset management and acquisition strategy services to the Hong Kong-based investor. The partners had been speculated to be vying for the Milestone Logistics Group industrial portfolio from Blackstone.
