Quintessential expands footprint in ‘Adelaide’s best location’
Quintessential Equity is paying $73 million for Adelaide’s Telstra House, with plans for a green focused redevelopment.
The purchase of 30 Pirie Street comes 14 months since the fund manager snapped up a neighbouring office, 100 King William, for $71.5m.
That asset was facing a 50 per cent vacancy, with key occupier the Commonwealth Bank of Australia having announced it would not renew.
Its latest property will be 91pc empty next February when Telstra moves out.
Australian Unity was the seller; the investment was held in its Office Fund (AOF).
Quintessential will hold it in the Master Fund 3.
Telstra dictated value
Developed by Telstra between 1984-1987 and for 12 months the city’s tallest building – 30 Pirie St rises 117 metres, or 23 storeys.
The telco sold it to Investa over 20 years ago.
AU purchased it in 2013.
At its peak five years ago, with a seemingly secure covenant to Telstra, the asset was valued at $119m.
AU explored options
Proceeds from the Quintessential disposal will repay debt.
“AOF investigated a repositioning and refurbishment strategy…including an option for a significant value-add capital expenditure program, and determined that the divestment of the asset presented the best opportunity to maximise value for…unit-holders,” AOF fund manager, Nikki Panagopoulos, said (story continues below).
“The sale…maximises returns for unitholders and enhances AOF’s overall portfolio construction,” she added.
“The sale via a targeted off-market campaign follows the receipt of an unsolicited offer,” according to the executive.
“The purchaser is currently documenting a sustainable financing package with an Australian government agency”.
Settlement is expected next month.
Telstra hangs up after 36 years
Telstra House contains 24,781 sqm, last renovated four years ago.
The site spreads 2734 sqm.
Combined with 100 King William St – Quintessential controls over 5250 sqm in the pocket, described by director Shane Quinn as Adelaide’s best location.
Elsewhere in the CBD, the fund manager recently renovated a 14 level office at nearby 431 King William St.
Last March, it was awarded a state government contract to deliver and own a 16 storey commercial investment as part of the Lot Fourteen project, near the city’s Royal Botanic Gardens.
Telstra meanwhile will downsize to 6000 sqm at Charter Hall’s 60 King William St joining Services Australia and National Australia Bank, the latter which committed this month for 3955 sqm (including a 255 sqm ground floor tenancy).
Subscribe to our newsletter at the bottom of this page.
