29 • Jun • 15

Propertylink in $303.3 million combined office / industrial deal

Media release

29 June 2015

Property investment and asset management company, Propertylink, has continued its recent acquisition momentum with a combined office and industrial transaction valued at $303.3 million.

Propertylink is a leading Australian real estate and infrastructure fund manager with more than $2 billion in assets under management and over $700 million of assets acquired throughout 2014.

In a deal that crosses the office and industrial property sectors, Propertylink acquired the 320 Pitt Street, Sydney office tower for $200 million along with eight industrial assets located across Australia for $103.3 million. Goldman Sachs and Grosvenor Group are co-investors in both elements of the transaction.

The purchase of 320 Pitt Street, Sydney is Propertylink’s largest office acquisition to date. The office tower features 30,000 sqm of net lettable area and is 100 per cent leased to Telstra for 5 years. The purchase reflects an acquisition yield of 8.26 per cent and was brokered by Rob Sewell and Paul Noonan of JLL.

The eight industrial properties included in the combined transaction are located in Sydney, Brisbane, Melbourne and Perth with a weighted average lease expiry (WALE) of approximately 3.3 years. The purchase reflects a passing yield of 10 per cent and was brokered by Michael Fenton of JLL.

The acquired industrial properties will be included in the Propertylink Australian Industrial Partnership Portfolio (PAIP 1) which now has 36 assets valued at approximately $700 million.

Peter McDonald, Executive Director and Head of Property of Propertylink said:

“We have had some outstanding results in repositioning assets in the PAIP portfolio. This latest acquisition provides us with an enormous opportunity to apply Propertylink’s active management approach to drive the value in these assets. Propertylink has created a niche in the market by unlocking value in these types of assets.

“We are pleased to see the majority of capital in the market pursuing prime long-WALE assets. In the coming weeks we will see a number of prime asset deals announced that will be at historical low yields and which will re-rate the industrial sector. We fully expect the PAIP portfolio to benefit from this trend,” Mr McDonald said.

Steve Day, Managing Director of Propertylink said: “This combined transaction is a significant deal that crosses both the industrial and office sectors. We are delighted that our investors in PAIP 1 are investing alongside Propertylink with the value-add office strategy.

“We have previously delivered excellent returns when partnering with Aviva Investors on the repositioning of the 477 Collins Street office property in Melbourne. Our strong on-ground management team has a track record of generating value for our clients. We see this latest acquisition as a launching pad into other value-add office opportunities,” Mr Day said

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