Investa Commercial Property Fund ("ICPF" or the “Fund") has announced it has finalised the acquisition of a 50% interest in 135 King Street, Sydney (the “Building”), from Private Property Syndicate, managed by Colonial First State Global Asset Management. The 50% interest was acquired for A$130 million on a core yield of 7%. The acquisition will result in the Fund’s total assets under management increasing to over A$2.2 billion.

Stockland nominated ICPF as the buyer in December, by exercising its pre-emptive right as co-owner.

ICPF Fund Manager, Peter Menegazzo said: “We are very pleased to have secured an interest in an asset of this calibre, which strengthens ICPF’s weighting to Sydney, which reduced following the recent sale of 231 Elizabeth Street and the acquisition of assets in Brisbane and Melbourne.

Situated in a prime location, adjacent to the Pitt Street Mall shopping precinct and extensive transport and entertainment amenities, the 29-level building comprises 31,030m2 of net lettable area, with 27,100m2 of office accommodation and 3,930m2 of retail.

Currently 74% occupied, the recently refurbished building has 1,200m2 floor plates, allowing for flexible leasing options, with multiple, full or half floors available. The available space is refurbished to a high standard with potential rental upside. The three-level retail area, known as ‘Glasshouse’, has frontages to both Pitt Street Mall and King Street.

Mr Menegazzo said: “Its central location adjacent to Pitt Street Mall and large, flexible floor plates, will appeal to a wide range of tenants seeking good value, high quality, A-grade space in the centre of the Sydney CBD.

Market conditions are sound and we anticipate further improvement in tenant demand during 2014. This building will allow Investa to again demonstrate its capability in leasing and management, to improve occupancy levels and deliver valuation upside to unitholders.”

John Schroder, Chief Executive, Commercial Property at Stockland, said: “We’re looking forward to a new and productive joint-venture with Investa Commercial Property Fund on this prime retail asset with excellent potential for redevelopment, combined with A-grade office space in the very heart of the city.”

The acquisition follows an active period for ICPF, which has grown significantly as a result of strong support from both domestic and overseas investors, who have committed over A$1 billion in new equity in recent years, enabling a series of strategic acquisitions at attractive points in the cycle.

In February last year, ICPF acquired a 50% interest in 567 Collins Street, Melbourne from Leighton Properties for A$231 million, which is currently under construction. In June, the Fund purchased a 100% interest in 259 Queen Street, Brisbane from Grosvenor.

ICPF’s liquidity offer closed in early December with no redemption applications received.

Mr Menegazzo added: “We have made a point of setting and executing a clear strategy and we have a unitholder base that understands and is supportive. As a result, ICPF has been very fortunate to not only receive strong levels of capital support, but also experienced no demand during its most recent liquidity offer.

Going forward, we will continue to enhance value across the portfolio through active investment and a continued focus on delivering strategic priorities, including the sale of our remaining non-core assets in Milton, Brisbane and Macquarie Park in Sydney.”