7 Aug 2014

$1bn Cbus towers close to sale Sarah Danckert and Ben Wilmot

One of the biggest direct commercial property sales in Australia’s history is underway with GPT and its unlisted stablemate GPT Wholesale Office Fund, and AMP Capital snaring preferred bidder status on $1 billion-plus Cbus Property ­tower offerings.

The forthcoming sales will mark the resurgence of Australian capital for prime office towers, with REST Industry Super just last week buying a Sydney tower for $555 million and Investa’s wholesale office fund buying a half stake in a $777m tower in Perth.

While AMP and GPT declined to comment, each of the groups has been looking to build up their office funds with their equity raisings swamped by demand from superannuation funds and foreign investors.

The sale is being handled by Colliers International’s John Marasco, Nick Rathgeber and Leigh Melbourne as well as Ian Hetherington of Savills. They and Cbus declined to comment.

GPT and GWOF are believed to have trumped rival bidders for Cbus Property’s CBW building on the corner of Bourke and William streets in the Melbourne CBD.

The pair are understood to have offered $600m in a joint bid.

The CBW building consists of two towers — the 50,000sq m 181 William Street and 25,000sq m 550 Bourke Street — as well as the Goldsbrough Lane retail precinct, which spans 5000sq m.

Major tenants include insurer CGU, services firm Deloitte, lawyers Baker & McKenzie and Ashurst Legal, as well as Deakin University.

CBW will add to GPT’s impressive haul of Melbourne towers over the past year. The group recently picked up three office towers from Dexus, including 750 Collins and 655 Collins Street in the Docklands, as well as a half-stake in 2 Southbank Boulevard.

GWOF purchased a half stake in the $320m Ernst & Young tower from Cbus last year.

Meanwhile, AMP Capital has emerged as the frontrunner for Cbus Property’s National Australia Bank office building on Bourke Street in the Docklands on the cusp of the CBD.

The 63,000sq m building nestled next to Etihad Stadium was only recently completed.

AMP is thought to have bid over $430m for the building that is fully leased to NAB on a 15-year term in a deal expected to set valuation benchmarks for Melbourne office property.

The bid comes shortly after AMP Capital Wholesale Office Fund took full ownership of the $460m NAB House in Sydney in May by buying out a share held by Canadian property giant Brookfield.

AMP Capital Wholesale Office Fund also has a presence in Melbourne through the two massive Collins Place towers at the Paris end of the CBD.

The deal will allow Cbus Property to focus on building up its development pipeline.

Cbus owns what is regarded as the best commercial development site in Melbourne, at 447 Collins Street, with the group in the early stages of planning a $1bn mixed-use development and chasing ­prospective tenants including ­SuperPartners and King & Wood Mallesons.

The company, which is the property arm of the massive Cbus super fund, is thought to have entered the race to develop Telstra’s new 75,000sq m office tower in Melbourne.

It is also looking to secure more sites in Sydney and, if the mooted deals proceed, it may emerge with a role in AMP’s revamp of its Circular Quay holdings.

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