Google HQ, Media House up for grabs

But, like other major landlords, GPT is pushing to recycle capital and upgrade its managed portfolio of major office towers. Already, the fund manager is forging ahead with a new $563 million, 29,000-square-metre office tower on Melbourne’s Flinders Lane.

Meanwhile, on offer is an 18,000-square-metre office building in Sydney’s Pyrmont, known as Workplace6 and fully leased to Google Australia. In Melbourne, Media House at 655 Collins Street is fully leased to Nine although the building also has some vacancy. Cushman & Wakefield and CBRE have been appointed to market both assets.

The offerings come after two years of significant upheaval across the office market, which has sent valuations plunging further than they did during the global financial crisis.

But a string of recent deals has boosted confidence that values are finally bottoming out and, as the interest rate cycle shows signs of easing in global markets, confidence is growing that foreign institutional buyers are returning.

The proposed sales will be closely watched as barometers to market sentiment. The Google HQ is now thought to be worth about $300 million after its December book was recorded as $317.5 million. The Melbourne building was valued at $153 million in December but is thought to be worth closer to $140 million in the current market.

Mitch Noonan, from CBRE, said the Google HQ has an “absolute waterfront position”, with a campus-style format and would give its next owner income security and future growth potential “from one of the world’s strongest covenants”.

Cushman & Wakefield’s Nick Rathgeber said the 16,000-square-metre Collins Street property, which was built in 2009, also had the potential for a large-scale redevelopment into residential use.