Investors spring into buying mode

A NEW round of transactions totalling up to $130 million have been concluded in the past week as investors take advantage of the spring sales program.

A NEW round of transactions totalling up to $130 million have been concluded in the past week as investors take advantage of the spring sales program.

It is understood that a global property fund manager, the $10.6 billion MGPA, has paid $106 million for the office tower at 6-10 O'Connell Street in the CBD, one of its first large investments in the country.

MGPA was formed by the executive chairman, James Quille, after he led the management buyout of Lend Lease's Global Property Investment fund in February 2004. In July 2004, Mr Quille initiated the formation of the joint venture with Macquarie Group.

The O'Connell Street building was sold through agents at CBRE.

Other agents said the property was initially on the market for about $115 million but with a higher tax rate - after the government moved to double the withholding tax rate for internationally managed investment trusts from 7.5 per cent to 15 per cent in the budget in May - the price was negotiated down.

The chief executive for Asia at MGPA, John Saunders, said the most interesting markets at present for creating low-risk real estate returns were Japan, Australia and Hong Kong. He said these markets are driven by solid macroeconomic and real estate market dynamics.

Agents have said they expect the second half of calendar 2012 to be busier in the lead-up to Christmas, and then rise next year as superannuation and sovereign funds re-enter the higher yielding and defensive property market.

In another deal, the Investec Property Opportunity Fund has sold the retail space under Bondi's Beach House for $23 million to a private investor through agents Warren Duncan and Miron Solomons at City Commercial in Sydney and Melbourne's Gross Waddell.

The sale was said to have been completed on a yield of about 7 per cent for the eclectic mix of cafes, restaurants and providores. Agents said commercial sales at Bondi come as the residential sector blooms with record prices for beach apartments.

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