Investa

Telstra and Investa sign Australia’s largest-ever lease

3 March 2009, Melbourne: Telstra, Australia’s leading telecommunications and information services company and Investa Property Group, one of Australia’s largest unlisted owners of commercial real estate, have signed the largest lease deal in the history of Australian commercial office transactions.

The agreement between Telstra and Investa relates to three buildings:
• 242 Exhibition Street in Melbourne’s CBD (total office space: 63,372m2)
• 320 Pitt Street in Sydney’s CBD (total office space: 28,866m2)
• 231 Elizabeth Street in Sydney’s CBD (total office space: 22,964m2)

Total office space size is 115,202m2, equivalent to approximately:
• 100 floors of office space; or
• 6 times the size of the Melbourne Cricket Ground.

The deal, which was executed on 27 February 2009, was the culmination of more than 12 months of negotiation.

Campbell Hanan, Group Executive of Investa’s Commercial Office Group said, “Our collaborative approach enabled us to work with Telstra to provide the foundation for its modernised work environment. Investa will undertake significant building refurbishment works with upgrades to lifts, air-conditioning and general aesthetic improvements. This will all be undertaken with a focus on sustainability, a facet of our business for which we are renowned.”

“Telstra’s long-term lease underpins the value of the assets. From an Investa point of view we are delighted, as this deal secures long-term income from one of the most highly rated Australian corporations. It also demonstrates and endorses the relationship that we have developed and nurtured with our largest tenant.”

In this market characterised by volatility and uncertainty, Investa and Telstra have collaborated on a deal which delivers certainty, flexibility, efficiency and long term value to each other’s business.

Hanan concluded that “Telstra has high expectations for its occupancy needs. Meeting these needs for the next 10 years and beyond is a challenge both Investa and Telstra are pleased to have been able to meet.”

For further information contact:
Investa Property Group
General Manager – Marketing, Katie Barton-Harvey
on 02 8226 9391 or 0427 234 862, kbarton-harvey@investa.com.au


ADDITIONAL NOTES

Against the tide of negative news concerning the Australian property market, this is a major positive announcement which some feel may signal the beginning of a turnaround for commercial property.

This is the latest Investa announcement that runs counter to perceived negative trends in the industry. Other recent Investa accomplishments:

• Pre-lease to Coca Cola of 9,000 m2 at the new Ark building, which is under construction in North Sydney and due to open next year,
• Agreement on terms of 15,000m2 of space at 485 La Trobe Street in Melbourne.
• Major lease executions at 400 George Street (24,000 m2) and 255 Elizabeth Street in Sydney.

Over all, the Investa office portfolio remains approximately 97% occupied.


ADDITIONAL QUOTES

Michael Cook, Investa Group Executive:

“We have been working on this deal with Telstra for about 12 months. It was extremely complex and required 42 separate documents, three separate office buildings, the Investa Property Trust as well as the Investa Diversified Office Fund (IDOF) and the Investa Commercial Property Fund (ICPF). The deal also demonstrated the strength and importance of the landlord/tenant relationship and the ability to add value for both parties. Both parties came together to formulate a program that is mutually attractive and meets key objectives for both companies.”

Scott MacDonald, Investa Chairman and CEO:

“This is quite an accomplishment for Telstra and Investa and demonstrates market strength and underlying values in the top end of the commercial office market. Well capitalised landlords with property expertise and ownership of top tier office buildings will find success even in challenging economic times.”

Notes to the editor:

About Investa
Investa is one of Australia’s largest unlisted owners of commercial real estate. Headquartered in Sydney, with management and development offices in Melbourne, Brisbane and Perth.

Since its inception in 2000, Investa has grown to control real estate assets of approximately AU$8.5 billion (comprising Commercial Office Group portfolio assets, funds under management and the land development asset portfolio). In September 2007, Investa was purchased by funds managed by Morgan Stanley Real Estate (MSRE) and delisted from the Australian Securities Exchange.

Investa has proven experience in three key business areas:

• Commercial Office Group
A fully integrated commercial real estate business. We buy, own, develop and manage high-quality office buildings in premier locations in Australia’s capitals. This end-to-end business model gives us the ability to ensure optimum quality and performance of our properties and our property services. Our Commercial Office Group has approximately AU$6.5 billion of assets under management.

• Investa Funds Management
Investa manages a range of wholesale and retail funds on behalf of our clients, who range from institutions, superannuation funds, industry funds and retail investors. Funds under management exceed AU$2.2 billion.

• Land Development
Investa undertakes commercial, industrial and residential development in select locations across Australia. Our residential land developments encompass broad-acre subdivisions in New South Wales, Victoria, Queensland, and Western Australia and we have a development pipeline in excess of AU$2 billion.