Investa Commercial Property Fund ("ICPF" or the “Fund") today announces it has acquired a 50% interest in QV1, 250 St Georges Terrace, Perth (“QV1”) from Investa Property Trust for $388.5 million, on a yield of 7.4%.
QV1 is a landmark building in a prime location in Perth’s CBD, with expansive Swan River and CBD views. The 42-level Premium grade tower comprises 63,964m2 of net lettable area with an adjoining retail plaza and over 1,000 parking spaces. Designed by Harry Seidler, the building has 1,600m2 average floor plates and is 99.9% occupied with a 7.8 year WALE. Key tenants include Chevron Australia, Worley Parsons and Herbert Smith Freehills.
ICPF Fund Manager, Peter Menegazzo said: “As one of Perth’s pre-eminent office buildings, QV1 provides ICPF with a core entry point to the Perth CBD, providing strong defensive attributes and diversification into another key Australian office market and range of tenant industries. The asset has high income returns and a solid growth profile, with proven appeal amongst premium tenants.
The acquisition delivers on the Fund’s strategy of owning the highest quality, prime office buildings within Australia’s major CBD office markets and follows an active year for the Fund, which has acquired key assets in Sydney and Brisbane over the last 12 months and was oversubscribed in its recent $350 million capital raising.
“Securing this building off-market provided us with first mover advantage in what remains a competitive environment for quality office assets with long term lease expiry profiles, as evidenced in recent market transactions,” said Mr Menegazzo.
“Whilst market conditions in Perth continue to adjust, leading indicators show we are now through the bulk of contraction activity. We view our entry point into the market as a somewhat counter cyclical play via an asset with highly defensive characteristics, which will comfortably carry us through any near term market weakness.”
With commitments to acquire nearly $600 million in new investments which includes QV1 and the recently acquired 201 Kent Street, Sydney, ICPF will shortly commence a domestic and offshore capital raising.
“Investors have historically been attracted to our high quality portfolio, active asset management and sector specific focus. Early soft soundings for the upcoming raising have been very positive and we expect it to be well supported by both existing investors and a number of new investors, with whom discussions are well progressed,” said Mr Menegazzo.
Due to strong investor support ICPF has grown significantly since 2010, with almost $1.2 billion in new equity committed. The Fund acquired a further 50% interest in 201 Kent Street Sydney earlier this month and in February acquired a 50% interest in 135 King Street, Sydney. In June 2013, the Fund purchased a 100% interest in 259 Queen Street, Brisbane.
The fund’s current focus is on enhancing value across the portfolio through active investment and a continued focus on delivering on its strategic priorities, including the sale of its remaining non-core assets in Milton, Brisbane and Macquarie Park in Sydney.
Campbell Hanan, CEO, Investa Office said: “ICPF has made a point of setting and executing a clear strategy and has a unitholder base that understands it and is supportive. As a result, ICPF has been very fortunate to receive strong levels of ongoing capital support in recent years that has enabled it to build the leading, prime CBD office portfolio in the country with a strong, stable return profile.”