GIC zeroes in on Perth’s Exchange Tower
Singapore’s GIC Real Estate, AMP Capital and West Australian group Primewest are negotiating a deal that would see the sovereign wealth fund take almost full control of Perth’s Exchange Tower in a play that values the asset at close to $330 million.
The deal, which would be one of the city’s largest commercial property sales, is being struck at a core capitalisation rate of about 6.5 per cent, putting Perth’s leasing recovery and attraction to institutional investors on display.
Cushman and Wakefield’s Josh Cullen and JLL’s John Williams are marketing the complex for vendors AMP Capital and Primewest but declined to comment.
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The Singaporean group is proving a canny investor in major office markets that are turning around and has outlaid about $450 million with Charter Hall in Brisbane’s office market.
GIC awarded both Primewest and Charter Hall mandates to invest in counter-cyclical office plays and the Perth deal would be the first Primewest has made.
The tower was contested by acquisitive Chinese developer and investor Zone Q and listed group Elanor.
The sale comes after Primewest picked up a half-stake in the tower at 2 The Esplanade two years ago from the private property syndicate run by Vicinity Centres and then worked with AMP to lift it.
That deal valued the complex at $227 million, but Primewest and AMP Capital have undertaken a capital expenditure program, lifting the building’s quality and slashing its vacancy rate.
Primewest put its interest on the block mid-year and AMP Capital followed. They combined to offer their half-stakes as a means of getting the best pricefor the asset.
AMP Capital’s stake in the 40-level tower is held in its unlisted wholesale office fund, which owns quality towers around Australia and has other projects in Sydney where it could deploy the proceeds.
The two groups effectively transformed the premium-grade office building, winning several new tenants and taking its occupancy to more than 90%.
The pair undertook a $50 million upgrade, including improvements to the lifts, a reworked forecourt and lobby, and increased retail presence.
In Brisbane, Charter Hall bought Santos Place last year from Malaysian government-owned Permodalan Nasional Berhad for $370 million and also picked up the landmark 343 Albert St tower for $108 million.
GIC is separately selling a half-stake in Sydney’s Chifley Tower, with the process closing next week amid expectations about 10 heavyweights could bid for the $900 million stake via JLL and Cushman and Wakefield.
This article originally appeared on www.theaustralian.com.au/property.
