Invesco Real Estate has paid around A$400m (€245.7m) to buy a 50% stake in the 1 The Esplanade office development in Western Australia from Brookfield Asset Management.

In May last year, Brookfield’s real estate arm agreed to buy, and then develop and lease back 1 The Esplanade, Elizabeth Quay to Chevron Australia.

Chevron agreed to lease up some 78% of available floor space of the 29-level, 54,000sqm office building on a 15-year lease for its new Australian headquarters.

Ian Schilling, co-chief investment officer and head of Asia Pacific Core Funds told IPE Real Assets that Invesco saw “good relative value” in Perth and that similar-quality buildings with long term leases to secure credit covenants in Sydney or Melbourne would transact at significantly lower yields.”

“We are buying into what we believe to be one of the best office buildings in Perth. It represents an attractive long term investment,” he said.

Sophie Fallman, Brookfield managing partner and head of real estate in Australia, said: “We’ll break ground on 1 The Esplanade today. This will be a milestone moment in the evolution of Elizabeth Quay.”

Brookfield expects to complete construction in mid-2023.

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