Investec offloads Fortitude Valley tower for $94m
The dual-listed Investec Australia Property Fund has capitalised on the heat in Brisbane’s office tower market, offloading an Ann St tower for $94 million to a new entrant into Australia.
The fund, that is listed in South Africa and on the ASX, bought the Brisbane office block for $65.5 million in 2014.
It picked up the property at 757 Ann St in Fortitude Valley from Office Park Developments ahead of the boom in Brisbane’s office values.
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The latest sale price equates to a passing yield of 6.6% and the fund will use the proceeds to repay debt.
It is anticipated the fund’s gearing will drop to about 21% after the deal.
The trust’s chief executive Graeme Katz says the vehicle would look to sell properties where “valuation creation” had been maximised, to protect against downside risk or to improve the overall quality of the portfolio.
“Given the property presents as new, the weighted average lease expiry is just under 4.5 years and there is currently strong demand for high quality office properties in the Brisbane fringe office market, we determined that it was an opportune time to consider a sale of the property,” he says.
The sale was handled by Cushman & Wakefield’s Mike Walsh and Peter Court and the price came in 11% above the trust’s book value of $85 million.
The Investec-managed fund says it has additional funding capacity for future acquisitions, indicating it is still keen to expand its portfolio.
This article originally appeared on www.theaustralian.com.au/property.
