CapitaLand Buys 120 Spencer St Office Bldg In Melbourne
AUSTRALIA – CapitaLand Investment (CLI), a real estate investment manager (REIM) based in Singapore, has just purchased a freehold office building in the Western Core of Melbourne’s central business district (CBD) for an undisclosed price, according to a press release published on Tuesday morning (7 June, SGT).
Known as 120 Spencer Street, the commercial property has a net leasable area (NLA) of 32,000 sq m (344,445 sq ft). It has a healthy committed occupancy rate of 97.5 percent and a long weighted average lease expiry (WALE) of 6.7 years.
The 22-storey office tower’s tenants include coworking space operator WeWork and renowned local educational institutions like Redhill Education and Central Queensland University.
Apart from having triple street frontages and a potential 22,000 sq m (236,806 sq ft) of unused gross floor area (GFA), the office building has undergone A$30 million of upgrading works in the last five years, including the recent installation of energy-efficient mechanical and engineering equipment.
Since 1 November 2021, 120 Spencer Street has operated fully on green electricity and has contracted to do so for the next 10 years. It has also received the Energy 4-Star rating and Water 5.5-Star certification under the National Australian Built Environment Rating System (NABERS).
Moreover, 120 Spencer Street is situated opposite the Southern Cross Station, a major public transport hub that links with the wider Melbourne region, with intra-city tram lines at its doorstep. It also benefits from the recent revitalisation of the Western Core, led by the development of the Docklands precinct, the addition of new premium grade office building, refurbishment of existing commercial properties and migration of office tenants, including many prominent occupiers, to the precinct.
The office property marks CLI’s fifth investment in Australia in the past six months. The asset was acquired on behalf of the buyer’s core-plus fund known as CapitaLand Open End Real Estate Fund (COREF).
This is COREF’s 1st acquisition in Australia and its 4th in the Asia Pacific (APAC) region. The fund, which was created in August 2021, has made an overall investment of roughly US$900 million (US$1.24 billion) to date.
“Leveraging CLI’s deep expertise and extensive network in the Asia Pacific, we continue to build up COREF’s portfolio with high quality assets across gateway cities in Japan, Singapore and now Australia,” commented Simon Treacy, CEO of private equity real estate at CLI.
“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,” he added.