A representative for the fund manager confirmed it will sell 90 Collins Street in Melbourne’s “Paris end” as it aims to cash up, debt down and try to weather the recent share market storm.
The fund manager is selling $900 million of commercial property assets nationally with the biggest asset up for grabs an office building in St Georges Road Perth.
GE Real Estate paid $139 million for 90 Collins Street, as part of a $450 million portfolio purchase off West Australian based investor Cape Bouvard. The sale price for the building equated to a yield of 5.8 per cent, which was the lowest ever recorded for a Prime CBD Office asset in Melbourne.
At the time there was a huge shortage of investment grade stock, and a throng of cashed up institutions prepared to pay big bucks for whatever became available. Investor confidence was buoyed too by a strong CBD leasing market and an expectation demand for commercial property, particularly from institutions, would continue for a lot longer than it did.
The 22-level, 21,300 square metre A-grade building sits between Nauru House and 120 Collins Street, opposite 101 Collins Street.
Savills sales agent Mathew Kent is expecting the property to fetch between $140 million and $160 million, which would equate to a sub 6 per cent yield. Rival agents say that is optomistic, and say in the current climate the building will be lucky to make back what it cost in 2006.