Wholesale office fund buys 222 Exhibition Street at record low yield
The AMP Wholesale Office Fund purchase of 222 Exhibition Street, at a low 6 per cent yield, may result in a more aggressive approach being taken by analysts at Australia’s biggest institutions and even higher prices being paid for the limited number of CBD office buildings available.
Colliers International managing director John Marasco confirmed yesterday the 30,000-square-metre building sold for $162.5 million, about 20 per cent more than vendor Allco Wholesale Property Trust paid in 2005 – and despite a looming vacancy as major tenant the Transport Accident Commission makes plans to leave.
“We have sales evidence to support where CBD office values are now, and the market has been re-rated,” said Mr Marasco. “The tight yield will give property valuers at the major institutions confidence to bid more aggressively in the Melbourne market.”
The last major Melbourne CBD office sale, in December last year, came when GE Real Estate paid $139 million for 90 Collins Street, on a yield of 5.8 per cent.