This article is from the Australian Property Journal archive
SUPERANNUATION fund Rest has finalised its acquisition of a one-third stake in the recently completed 50-floor Quay Quarter Tower in Sydney’s CBD, four years after entering into a $900 million deal with AMP.
Quay Quarter Tower is the redevelopment of the old 45-floor AMP Tower located near Circular Quay at 50 Bridge Street. Completed in April, the new tower has 89,000 sqm of offices, 95% of which is leased to tenants including Deloitte, Corrs Chambers Westgarth, AMP and others, as well as a flexible workspace managed in partnership with The Work Project, and around 4,000 sqm of retail space.
The building also has a 5.5 Star NABERS Energy Rating, and a 6 Star Green Star Design & As Built rating from the Green Building Council of Australia.
Rest entered into a contract to acquire a one-third interest in 2018. The remaining interests are owned by the AMP Capital Wholesale Office Fund and Dexus Wholesale Property Fund, which took its stake through last year’s merger with AMP Capital Diversified Property Fund.
“With the acquisition of the stake in Quay Quarter Tower, around 1.8 million Rest members now have an interest in a state-of-the-art, premium-grade skyscraper overlooking Sydney Harbour,” said Simon Esposito, deputy chief investment officer, Rest.
“This landmark property is expected to generate strong long-term net returns for our members. With nearly all the office space leased under long-term arrangements, it offers a secure income stream.”
Esposito said investments in property assets can provide important stability and resilience to an investment portfolio, especially in periods where share markets are volatile and fixed income returns are weaker.
“In the past six months we have experienced significant levels of inflation not seen for some time, as well as volatile share markets.
“Property assets can typically generate income that tracks inflation, such as ongoing lease payments, to help offset the impact of volatility and broader inflation.”
Rest has about $6 billion invested into unlisted property, including office buildings, retail shopping centres, industrial warehouses and residential apartments, both domestically and offshore. Its default core strategy investment option has a benchmark asset allocation of 11% to property.
Redevelopment of the tower saw about 68% of its core structure retained, including 95% of the internal structural walls, while also doubling the leasable space.
According to Rest’s head of responsible investment and sustainability, Leilani Weier, more than 8,000 tonnes of embodied carbon was saved during construction by upcycling much of the original structure and reusing materials, the equivalent of 35,000 Sydney to Melbourne flights from Sydney to Melbourne.
Rest is aiming to have its directly owned property assets achieve net zero carbon emissions by 2030, as part of its roadmap to achieving a net zero carbon footprint for the fund by 2050.
Environmental ratings also include a 5.5 Star NABERS Office Energy Rating Base Building, 4 Star NABERS Office Water Rating Base Building and WELL certification.
