LaSalle Investment Management, on behalf of pension fund CalSTRS (California State Teachers Retirement System), has sold a half share in a 30-storey Melbourne CBD office for $205.675 million.
The vendor picked up the whole property, 222 Exhibition Street, for $231m in 2015.
Its part-sale to Singapore’s GIC after a renovation is being struck on an initial 5.1 per cent passing yield according to this item with more detail in The Australian.
Prior to the COVID-19 pandemic, the opportunity was being marketed for about $210m, that report adds.
Denton Corker Marshall penned the office which was constructed between 1986-1988.
Former TAC House at 222 Exhibition Street
Eleven per cent of the investment’s annual revenue comes from Secure Parking which operates a 478-bay car park.
Almost 60pc of the 30,289 square metre A-grade office space is tenanted to the state government – the majority for VicRoads (story continues below).
Another 17pc is rented to co-working group WeWork.
Until it moved its headquarters to Geelong in 2018, some 20,000 sqm was occupied by WorkSafe.
On a 5174 sqm parcel at the north east corner of Little Bourke St, 222 Exhibition St was also once known as TAC House.
GIC’s Melbourne spending spree continues
The Exhibition St deal comes three months after GIC and Dexus spent $644m to buy a half share of the Rialto Melbourne complex at 525 Collins St.
With Grocon, the Singapore group has since 2018 acquired three inner-city Melbourne sites to replace with build-to-rent based projects including a $135m parcel abutting the Arden train station, in North Melbourne, from luxury car dealer Nick Theodossi.
The other properties were permit ready: Richmond Plaza at the north west corner of Bridge and Church roads, in the east, which cost $50m, and a Southbank block, 256-266 City Road ($35m).