Singapore’s GIC Buys 50% Stake

Singapore’s GIC Buys 50% Stake In Melbourne Office Tower

AUSTRALIA – Singapore’s sovereign wealth fund GIC has agreed to purchase a half-stake in 555 Collins Street, a 516,668 sq ft office building in Melbourne’s central business district (CBD) after the property secured Amazon and Aware Super as anchor tenants, reported Mingtiandi on Sunday evening (14 August, SGT).

While GIC’s investment in the A$800 million ($568.3 million) office building was not disclosed, the sovereign wealth fund is estimated to be investing at a capitalisation rate of under 4 percent. The seller, Charter Hall, said the transaction was closed directly between the two parties.

Expected to be completed in 2023, Amazon announced its pre-lease commitment at the commercial property when building works commenced in April 202. The e-commerce giant’s web services arm has agreed to lease up to about 150,695 sq ft as it intends to transfer out of its existing office at 8 Exhibition Street.

As for Aware Super, Australia’s 3rd biggest pension fund, it has committed to lease around 86,111 sq ft as it plans to consolidate its offices that are presently located in three different areas.

“Our development and asset management teams have achieved leasing with major commitments from Amazon and Aware Super, whilst further leasing is well advanced, highlighting the bifurcation we have expected with tenant customers increasingly attracted to brand new, state-of-the-art space to satisfy the expectations of their people and customers,” said the CEO of Charter Hall’s office division, Carmel Hourigan.

Charter Hall credited the commercial property’s high environmental, social, and governance (ESG) criteria for attracting GIC to invest. In fact, the Gensler-designed office building aims to obtain a 5-Star rating under the National Australian Built Environment Rating System (NABERS), a 6-Star rating under Green Star regime for eco-friendly buildings, and a Platinum score on the WELL chart for healthy developments.

GIC’s acquisition of a 50 percent stake in 555 Collins Street comes merely eight months after it jointly bought with Charter Hall’s Prime Office Fund (CPOF) an office property in Canberra, as other Singapore-based real estate investors continue to seek commercial properties in Australia.

In June 2022, Singapore-listed CapitaLand Investment purchased 120 Spencer Street, a 22-storey office building just opposite 555 Collins Street, for A$325 million.

In February 2022, the property division of Straits Trading forked out A$150 million to acquire a set of properties in the Docklands area west of Melbourne’s CBD, including a pair of adjacent freehold office buildings at 192 Harbour Esplanade and at 1010 La Trobe Street.

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