Hong Kong-listed Link REIT has entered into a $596 million deal with Oxford Properties to invest in a portfolio of five offices across Sydney and Melbourne worth more than $2.3 billion.
The Investa Gateway Office (IGO) portfolio comprises the office buildings at 126 Phillip Street, 388 George Street, 151 Clarence Street and 347 Kent Street in Sydney, as well as the 567 Collins Street office in Melbourne.
The prime-grade office assets share a focus on sustainability and will be managed by Investa.
Under the deal, Link will own a 49.9% stake and Oxford Properties will own the outstanding 50.1% interest in the portfolio.
388 George Street Sydney
“The Australian economy has been highly resilient and the investment in one of its highest quality prime office portfolios provides immediate scale, positions us strongly for the next cycle and aligns with our Vision 2025 growth strategy of diversifying and improving our portfolio mix in the region,” George Hongchoy, Link’s Chief Executive Officer said.
Oxford’s Head of Australia Alec Harper said they had created significant value and achieved a high-performing de-risked portfolio by leveraging Investa’s Australian office management expertise.
“Following on from the recent investment by Mitsubishi Estate into our Parkline Place project, today’s transaction further demonstrates the continued global institutional demand for prime and highly sustainable office product,” Harper said.
“Oxford will redeploy capital from the transaction into our prime office develop-to-core pipeline and build-to-rent develop-to-core investment strategy in Australia, where we continue to have a favourable long-term outlook.”
The deal is expected to be completed in the first half of 2022.
The deal comes after Allianz Real Estate and the National Pension Service of Korea (NPS) bought a 50% stake in Sydney’s Commonwealth Bank Place, also known as Darling Quarter, for about $625 million last week.
Other Sydney office deals include AEW’s sale of an A-grade office tower in the Sydney CBD to the Shayher Group for $199 million and Abacus Property’s acquisition of a Sydney CBD office building for $250 million.
347 Kent Street Sydney
Singapore-listed CapitaLand Integrated Commercial Trust recently purchased a half stake in the 101 – 103 Miller Street building in North Sydney for $422 million, following its acquisition of two grade-A office buildings in Sydney for $330.7 million in December last year.
Dexus recently sold its interests in two offices in Sydney’s CBD and Parramatta totalling $555m, in addition to another Sydney CBD office for $385 million.
The Australian Unity Office Fund sold a grade-B office in Parramatta for $66 million, as Keppel REIT purchased a grade-A office development in North Sydney for $327.7 million.
In Melbourne, Rathdrum Properties bought the eight-level office building at 570 St Kilda Road from Terraplex for $67.6 million this week.
Other recent Melbourne office deals include Irongate Group’s acquisition of a stake in a grade-A office building in Cremorne for $130 million last month and Centuria Office REIT’s purchase of a South Melbourne office for $205.1 million last September.
Australia’s office investment market recorded $21.9 billion in transactions in 2021, up 60% on the previous year, according to Real Capital Analytics.
Interested in the office market? Take a look back at Australia’s biggest single office sales in 2021.
