Weekly Transaction Update – 16th November 2018

16 November 2018

This week we recorded 18 major transactions worth $733M ADIA transfers 1 Connell St for $334.5M The NSW LPI last week registered the sale of 50% of 1 O’Connell Street for $334.5M reflecting a transfer of the asset from Harina Company Ltd (a wholly owned subsidiary of ADIA) to the Trust Company. No stamp duty was payable on the transfer suggesting that it was part of a corporate reconstruction to interpose a trustee into the ownership structure. ADIA may be doing this to bring a local level of governance into the ownership process and or to allow a more effective mechanism for them to replace capital if required. The sale does however suggest that the whole asset is worth $669M, but somehow I don’t think so. 1 O’Connell Street is a 36-level office building with a net lettable area of 35,050 sqm of office space over 28 levels and Wintergarden Plaza, 2,744 sqm of net lettable retail space over three levels, plus two basement car park levels for a total of 75 cars. The ADIA transfer represents a capital value of $17,701/psm, which is well under market value for the asset with recent transactions of inferior assets trading above $19,000psm. Frasers Acquires 63 ha in Epping Vic Frasers Property Group have acquired a 63ha land parcel fronting Cooper Street & O’Herns Rd in Victoria for $40M. The transaction represents $63/sqm of total land area. The site is zoned industrial however it has a number of development constraints including the Someton High Pressure Gas Pipeline as well as several heritage and natural habit constraints and is within a closed landfill buffer and an active quarry buffer, all of which limit the developable area of the site. Frasers expect that the site will eventually accommodate up to 250,000sq m of built form. Wetherill Industrial Park Sales This week 2 industrial sites with development potential were sold for $83M. The first, at 1403 The Horsley Dr was sold for $21.89M. A Development Application for the 19,770sqm triangular parcel of land was submitted in 2016 for the development of a a Medical Centre, Child Care Centre for 107 children, 11 Light Industrial Units, a Service Station with an estimated cost of $14.8M. That DA was withdrawn in June this year following a range of issues raised by RMS and the site was subsequently sold through CBRE. The purchase price represents a value of $1,107/sqm. The second and larger sale was at 250 Victoria St, which traded for $61M. The 8.6ha site has an existing 11,021sqm office / warehouse together with hardstand and vacant development land. The existing warehouse is vacant and able to be leased. The asset was acquired by a private developer via listing agents JLL. The purchase price represents a value per site area of $709/sqm. Review our other transaction data at ReSourceData. * indicates unconfirmed price or apportionment of a portfolio sale #ReDataSource #Frasers #ADIA