Japanese group forges ahead with $72m office deal
While many of the country’s largest property players have gone to ground given the uncertainty caused by COVID-19, a Japanese group is forging ahead with the acquisition of a Melbourne office building.
The property at 200 Victoria Street in Carlton has been offloaded by Australian Unity’s diversified property fund for $72 million – a 20 per cent premium to its last book value – trading on a yield of just under 5 per cent.
The deal will be welcome news to the market, which has been otherwise very quiet as cautious buyers and sellers alike put most transaction decisions on hold.
It is understood Sydney-based real estate investment manager RealMont Property Partners made an unsolicited approach to the health insurer and property fund manager and acquired the asset on behalf of the Japanese group, all before the new foreign investment review board (FIRB) rules took effect.
RealMont manages several assets across the country on behalf of offshore capital.
Last year it acquired a half share in an office building at 121 Marcus Clarke Street in Canberra for $100 million on behalf of Japanese telecommunications group Nippon Telegraph and Telephone Corporation.
In 2018 it helped Singapore-based Soilbuild Business Space REIT with its foray into the Australian market with the purchase of a Canberra office building at 14 Mort Street for $55 million and a poultry processing plant in South Australia.
Calls to RealMont went unanswered on Sunday.
Director of capital markets at Colliers International, Trent Preece, confirmed he had negotiated a property deal for Australian Unity but would not comment on the buyer or give any further details.
Known as the EPA building because it is predominantly leased to the Environment Protection Authority, the six-level, A-grade property at 200 Victoria Street has a net lettable area of 7911 square metres and a weighted average lease expiry (by income) of 2.43 years.
Trinity College, part of the University of Melbourne, is also a tenant in the building after it took up to 10-year lease in 2014 for two floors and ground-floor space.
Australian Unity bought the property in 2014 for $42.3 million. It is known as one of Melbourne’s most sustainable buildings with a 6 Star Green Star Office Design rating.
Australian Unity’s Diversified Property Fund aims to deliver investors strong, steady income distributions, while identifying assets where it can add value for capital growth.
