Global investor BGO has teamed up with Investa, part-owned by Oxford Properties, to buy three office buildings in Australia from Dexus for A$715m (€614m). The latest acquisitions have lifted the portfolio now held by the BGO-Investa partnership to A$1.8bn.
One of the assets is in Brisbane at 123 Albert Street, with the other two in Sydney, at 30 The Bond, and 36 Hickson Road, a heritage office building, located in Barangaroo, a rejuvenated waterfront commercial precinct in the city.
BGO and Investa’s flagship office fund, the Investa Commercial Office Fund (ICPF), will each hold a 50% interest in the Brisbane building, while BGO will acquire the Sydney assets, in which it plans to invest “significant “capex to reposition the building and to capitalise on strengthened market conditions in Barangaroo, developed to be an extension of the Sydney CBD.
Marcus Merner, managing partner and head of Asia at BGO, said: “We believe this is an attractive point in the cycle to invest in high-quality office assets in Australia’s leading CBD markets. Sydney and Brisbane continue to benefit from constrained new supply and strengthening demand for well-located, highly amenitised workplaces, creating opportunities for disciplined capital investment and active asset management. We are pleased to expand our partnership with Investa, whose local operating acumen will be central to executing the business plans for these assets.”
Peter Menegazzo, chief executive officer at Investa said: “We are delighted to deepen our partnership with BGO through this transaction. We share a high conviction in the Sydney and Brisbane office markets and see a compelling opportunity to create long-term value by investing in high-quality assets at this point in the cycle.”
Brendan Looby, fund manager ICPF and head of asset management at Investa said: “123 Albert Street is a strong fit with ICPF’s strategy of investing in high-quality, well-located assets that can deliver sustainable long-term performance for our investors.
“The investment extends ICPF’s presence in Brisbane, following the opening of 360 Queen Street earlier this year, and further increases the fund’s exposure to premium-grade office assets.”
A Sydney-based firm, Cliffbrook, is working alongside BGO as its local Australian partner on the transaction. Investa will provide investment, asset and property management services across the portfolio.
Dexus Group CEO and managing director Ross Du Vernet said this recent round of transactions demonstrates “our disciplined approach to capital management and meeting commitments to security holders”.
He added: “We have a high-quality investment portfolio and transactions like these show we can secure liquidity at pricing which represents a significant premium to what is implied in the Dexus security price. We remain focused on initiatives that demonstrate and unlock value.”
Upon completion of the transactions, expected in October, Dexus is due to receive around 67% of the sale price with the remaining 33% balance deferred for 30 months and subject to a 6.25% per annum coupon.
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