CapitaLand Open End Real Estate Fund (COREF) has invested approximately A$325m (€218m) to buy its first asset in Australia.

CapitaLand Investment, COREF’s manager, said the acquisition of the office building at 120 Spencer Street in Melbourne lifted the portfolio of its new flagship fund to around US$900m (€838.5m).

The vendor of the building was CBRE Investment Management, which acquired the building for A$250m in 2017.

Simon Treacy, CEO of CapitaLand Investment’s private equity real estate, real assets, said: “The Australian office sector presents relative value, and our highly experienced local team has been able to capitalise on the window ahead of the post-COVID recovery to capture this opportunity.“

Treacy said: “Leveraging CapitaLand’s extensive network in Asia Pacific, we continue to build up COREF’s portfolio with high quality assets across gateway cities in Japan, Singapore and now Australia.”

Kevin Chee, CapitaLand Investment’s managing director, private funds, said: “COREF’s entry into Australia is in line with its strategy of building geographic exposure to institutional grade, income-producing assets across developed markets in Asia Pacific early on before diversifying into other sectors.”

Paul Toussaint, managing director for Australia, at CapitaLand Investments said: “120 Spencer Street is CLI’s latest deal in Australia, sourced and executed by our experienced local team.

“In view of the post-COVID recovery and companies’ steady return to work, we believe that the Australian office market is showing signs of growth that will overcome the near-term challenges of vacancy and tenant incentive levels.”

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