Weekly Transaction Update – 10th February

10 February 2017

For Week ending 10th February 2017 A solid week of transaction activity saw a total of $677M of property change hands. The largest deal this week was the acquisition of the World Trade Centre in Melbourne by local interests with an Asian backer for $267M. The buildings contain 50,000sqm of lettable area with approx 5% currently vacant. Another 43% will become vacant once the Victoria Police move into their new premises in 2020. Abacus and KKR were the vendor having picked up the asset in 2014 for an equivalent price of $172M. Abacus invested capex to improve the NABERS rating from 2.5 to 4 stars. It was reported that Abacus & KKR investors will reap an equity IRR of close to 30%. Whether the new owners can recover sufficient value from the Police tenancy or take advantage of the redevelopment potential of the site remains to be seen. The site is adjacent to the old Convention Centre which was sold last July to a Chinese Developer for redevelopment into 1100 apartments and also opposite Lend Leases’ Melbourne Quarter project. Together these three sites have enormous potential to transform what has been a forgotten corner of Melbourne CBD. Across the river in Melbourne, Vicinity took 100% control of the South Wharf DFO and Homemaker Hub by acquiring Plenary Groups 25% interest for $141M, on a yield of approx 7%. Investec also secured a sale this week with agreement on 126 Margaret Street Brisbane at $34M having acquired the building in 2011 from receivers for $19.5M. The sale price is in line on a rate per metre with other deals in the Brisbane market at $6,105/sqm. A large number of smaller suburban assets in the capital cities also changed hands Scoll through the list below or head to the Australian Property Transaction Data Map for further details. This Weeks deals