Singaporeans swoop as GPT exits Melbourne office block
ASX-listed property investor and fund manager GPT Group has sold an office building in Melbourne’s Docklands for $383 million to a Singaporean fund manager in one of the Victorian capital’s biggest transactions this year.
The 10-storey building at 750 Collins Street is occupied by Monash University, with another 10 years to run on the lease.
The transaction, brokered by Cushman & Wakefield and Colliers, was struck on an investment yield of about 6.6 per cent, a metric that will be closely watched by investors, analysts and prospective buyers as they await signs of recovery in Melbourne’s CBD office sector.
The 41,000 square metre building was held in GPT’s $8.4 billion unlisted office fund. It’s also one of the first big deals to be finalised since Micah Schulz, who was previously in charge of Lendlease’s flagship office fund, took charge as fund manager and head of investment management in office at GPT.
“The divestment of 750 Collins Street aligns with GWOF’s [GPT Wholesale Office Fund’s] strategy to thoughtfully recycle capital for redeployment into opportunities that will drive performance for investors,” Schulz said.
“This result underscores our disciplined approach to capital management, while the strong sales result reflects improving office fundamentals and the confidence in Melbourne’s commercial office market as the sector’s recovery gains momentum.”
The finalisation of Melbourne deal comes just three weeks after GPT used its balance sheet to buy an $890 million half share in Sydney’s Grosvenor Place, in what is shaping as one of the landmark transactions this year and a clear signal the office market recovery is underway in Sydney at least.
On the buy side in Melbourne is Singaporean fund manager TrustCapital Advisors. It’s one of TCA’s first big moves back in Australia’s office sector after selling much of its holdings here in 2017, including a five-asset portfolio worth more than $700 million.
“TCA has always regarded Australia as a long-term strategic investment destination, and this acquisition emphasises the confidence that we have in the Australian real estate market,” said executive chairman Chris Cheah.
“Our investors are delighted with the transaction and we continue to look for more opportunities to invest in Australia.”
