Investa Property Group is considering selling down stakes in up to three prime Sydney office towers which would deliver up to A$600m (€365.5m) in proceeds.
The mooted asset sales include 135 King Street, 1 Market Street and a 25% interest in 400 George Street, located in Sydney’s central business district.
The assets belong to the group’s A$6bn Investa Commercial Property Fund (ICPF) which raised A$800m of fresh capital last month.
When asked why the fund would be selling assets when it had completed a capital raising, Brendan Looby ICPF fund manager, said: “We are considering the sale of interests in a number of investments as part of an ongoing capital management initiative to strongly position the balance sheet.
“If the plan proceeds, it is intended the fund will retain a majority position in Market St and King St assets to provide strong alignment with the incoming partner,” he told IPE Real Assets.
ICPF is a joint owner with China Investment Corporation and M&G Asia Property Fund in 400 George Street.
Looby confirmed that Investa’s joint venture partners in 400 George St have been served a pre-emptive right to buy the 25% interest. The pre-emptive offer is due to expire later this month. If not exercised, Looby said the stakes would be offered for sale to incoming partners.
“Sale proceeds would be used to fund the short to medium term development pipeline with opportunities in Melbourne, Sydney and Brisbane.
He said the fund was also watching the market closely for attractive new further acquisition opportunities.
ICPF is mooted to be in due diligence to acquire an interest in 39 Martin Place, currently under development in Sydney’s financial district, from Macquarie, with pricing rumoured to be around A$800m.
Sources told IPE Real Assets that Investa is talking to Canadian financial services giant Manulife to jointly purchase the Martin Place project.
Investa is not confirming the negotiation, but IPE Real Assets understands that it is at an advanced stage.
To read the digital edition of the latest IPE Real Assets magazine click here.