RF Corval has purchased Melbourne’s Eureka Skydeck.
The c$60 million deal includes the level 88 tourist attraction and the full floor above it, occupied as a restaurant and event space, Eureka 89.
The occupier, Journey Beyond, a Quadrant Private Equity division, listed the properties in February with a 25 year leaseback.
Based on the starting rent ($3.3m), the sale is being struck at a 5.5 per cent yield.
JLL’s Josh Rutman, MingXuan Li and Peter Harper were the agents.
Charter Keck Cramer’s Andrew Grant was the transaction manager.
Level 88 and 89, 7 Riverside Quay
The deal is one of the largest single ownership strata titled sales in the city and sets a record rate per square metre within the 91 storey building – 7 Riverside Quay.
“Journey Beyond is delighted to complete the sale and leaseback of this iconic property to such a high-quality investor as RF Corval,” Journey Beyond chief executive officer, Chris Tallent, said.
“This new long-term lease arrangement underpins the future growth of this iconic experience in the heart of Melbourne and comes ahead of the launch of some exciting new initiatives under development for the Skydeck, due for completion later this year,” he added.
The Sydney buyer will hold the property in a new trust managed on behalf of several investors.
“RF CorVal was attracted to this opportunity due to the high amount of income on offer under the long-term triple net lease, coupled with an underlying property component that makes up a significant portion of the purchase price, viewed from either an existing use, or longer term alternate use perspective for the likes of residential” according to the manager’s head of Transactions, Oliver Picone (story continues below).
“When the sum of these two parts are combined the deal metrics looked quite compelling,” he said.
“We assess a lot of leaseback transactions and considered this one somewhat unique due to the vacant possession value of the property making up a large percentage of the purchase price, with the potential for multiple alternate uses in time,” the executive added.
“This was a comforting factor, as at the end of the lease term, the property is forecast to retain significant value”.
Journey Beyond’s other businesses include The Ghan, Indian Pacific, Outback Spirit Tours and Horizontal Falls Seaplane Adventures.
RF Corval reweights portfolio
Mr Rutman said the level of bidding from traditional tourism and hotel investors, as well as private individuals and established property trusts was pleasing.
“This transaction is another clear vote of confidence for Melbourne’s tourism industry more broadly,” according to the agent.
Last month, RF Corval sold Charter Hall an office and showroom at Sydney’s Macquarie Park for $55m.
In March the manager, led by former Multiplex chief Andrew Roberts, paid $20.5m for a warehouse converted office in in Brisbane’s Newstead.
A year earlier, the investor outlaid $75.5m for an unbuilt Collingwood office, in Melbourne’s inner north.
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