Investa Office Fund (IOF) announces today that it has entered into an agreement to sell 628 Bourke Street, Melbourne, for $129.6 million, subject to settlement adjustments including incentives. The sale is accretive to NTA and will reflect a 12% premium to forecast book value.
The transaction delivers on Investa's commitment to improving risk adjusted returns across the portfolio and follows an intense period of asset management that included leasing over 18,000sqm, increasing the weighted average lease expiry from 2.3 years to 6.8 years. The reported cap rate is 7.25%.
Toby Phelps, IOF Fund Manager, said: "After stabilising the asset through an active leasing program, we’re taking advantage of strong capital market conditions to crystallise value creation and selling at a significant premium to book value. We continue to focus on opportunities that provide attractive risk adjusted returns, while maintaining our disciplined approach to assessing potential investment opportunities.”
Settlement is scheduled for October 2014 and there is no impact on FY14 earnings guidance.
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