Weekly Transaction Update – 30th June

30 June 2017

Another big week in property transaction with over $1.5B of deals announced across 44 assets. The largest transaction this week was the announcement that Moelis acquired 25 Hotels for $677M from Redcape, who are currently controlled by US hedge fund owners . Moelis Australia CEO Andrew Pridham said the plan was to float the pub fund in 12 to 18 months. Redcape was formed after the two US hedge funds (Varde Partners and York Capital) snapped up the distressed pub portfolios of National Leisure and Gaming and the Hedley Group when pub values collapsed following the global financial crisis. In 2013, they carved out 41 Coles-managed pubs and successfully floated them as Hotel Property Investments (HPI) leaving the remaining pubs up for grabs. Moelis new fund is forecast to deliver an initial cash yield to investors of 8.75 per cent per annum prior to listing. There were several 5 other Hotel deals this with Charter Hall & Host Plus acquiring 3 assets for $23.2M and Gallagher Hotels selling one and buying another in a $65M deal. Also this week Australia Post announced the sale of 50% of their interest in 311 Spencer Street to Keppel REIT on a yield reportedly below 5%. The 65,000sqm building being developed by Australia Post in association with CBUS, will be leased by Victoria Police who are set to move in 2020 when the current lease at Melbourne’s World Trade Centre expires. The 30 year lease includes fixed annual rental escalations and options to renew for three additional terms of five years each. The lease is also subject to a market rent review in the sixteenth year, subject to a cap and collar. Also this week, there were 3 major retail assets sold, Terrace Central and Wodonga Plaza and Park Village Shopping Centre in 3 separate deals worth $112M and 2 major metropolitan commercial assets, 420 St Kilda Rd, & 2 Kendall Street, Williams Landing for $126M. This week capped off the 2nd Quarter with $10.7B of transactions which easily eclipses last quarter $6B result. Total sales for the 12 months to 30th June were $31.8B, an increase of 10% on the 12 months to 31st May 2017. There were a number of other deals this week. Scroll through the list below or head to Propel for further details.