The listed Growthpoint Properties Australia has bought an office building from the superannuation fund-backed investment group ISPT for A$90m (€55m), to seed a new property fund. The vendor is ISPT Core Fund.
The refurbished office building at 2 Constitution Avenue in Canberra is near the parliamentary precinct and Lake Burley Griffin, the landmark of the nation’s capital.
Growthpoint described the asset as a “deep value, countercyclical investment in a high-yielding government office in the Canberra CBD”. It was purchased at a price that represented 80% of its replacement cost.
The company state: “The Canberra office market is showing strong market fundamentals with low CBD vacancy and growth in the public sector driving office demand.” With a 9.5% vacancy rate, the Australian capital has one of the lowest office vacancies among major capital city markets, Growthpoint added.
The manager said that 88% of the passing income in the building was secured by Commonwealth and ACT Government tenants with staggered lease expiries and that new build economic rents were 64% higher than 2 Constitution Avenue passing rents, supporting tenant retention and future rental growth.
Growthpoint boosted its fund management capability in 2022 with the acquisition of the Sydney-based boutique property fund manager, Fortius. The latest acquisition will seed its unlisted Growthpoint Canberra Office Trust which is open to wholesale investors.
Growthpoint, whose single largest shareholder is the South African government owned, Public Investment Corporation, manages assets valued at A$6bn and directly owns a diversified portfolio valued at approximately A$4.4bn. Several of the company’s substantial shareholders are also from South Africa.
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