Investa Commercial Property Fund ("ICPF" or "The Fund") today announced its intention to exercise its pre-emptive rights to buy up to a further 25% interest in Deutsche Bank Place at 126 Phillip Street, Sydney ("Deutsche Bank Place" or "The Building"), one of Australia's premier CBD office properties.
The interest is being acquired on a yield of 6.35 percent based on a valuation of A$705 million (for 100% interest) and will result in the Fund’s total assets under management increasing to over A$1.8 billion.
Deutsche Bank Place is a Premium grade, landmark office building located at the northern end of Phillip Street in the Sydney CBD, with expansive harbour and park views from the upper floors, and a total net lettable area of 42,256m2. Key tenants include Deutsche Bank, Allens Arthur Robinson and Qantas.
The Building is currently owned 75% by Investa Property Group ("Investa") and 25% by ICPF. As co-owner of the Building, ICPF has pre-emptive rights in respect of a 25% interest that Investa had proposed to sell to Investa Office Fund, a listed real estate investment trust managed by Investa Listed Funds Management Limited.
The acquisition follows an active period for ICPF, which raised A$175 million during 2011 from both domestic and overseas investors and acquired an interest in one of Melbourne's leading office buildings, 120 Collins Street, Melbourne, and increased its interest in 400 George Street, Sydney. In 2011 the Fund also arranged and refinanced over A$550 million in debt, including a successful A$250 million 'A' rated MTN issuance.
Commenting on the acquisition Peter Menegazzo, Fund Manager of ICPF said: "This is a unique opportunity for ICPF to increase its ownership stake in one of Australia's premier CBD office buildings.
This strategic acquisition, which was strongly endorsed by ICPF unitholders, further positions ICPF as the country's premier unlisted office Fund."
Mr Menegazzo said the Fund had raised almost A$500m since 2009 which has been used to make strategic acquisitions at an attractive point in the commercial office cycle.
"A strong level of equity commitments has supported the Fund's strategy, with ongoing interest from prospective investors remaining evident, given the positive outlook for the office sector and the resilience of the Australian economy.
The Fund will focus on new strategic initiatives and enhance investment value through active management of its portfolio, including a number of asset sales which are underway,” said Mr Menegazzo.
ICPF was rated the top performing Australian unlisted office REIT for the 12 month period to 28 February 2012 according to the Mercer IPD Index.