Vendors push to wrap up $2b disposals
While some deals have been in the market for months, the vendors are said to be pushing buyers and their agents to get the deals completed in the next three months.
Included in these are about $300 million of NSW government properties being sold through Macquarie Group. Investec's deputy chairman, Geoff Levy, is also running the sale of the seven properties as part of his role at the government's Property Asset Utilisation Taskforce.
The key assets in the portfolio, which are likely to be leased back to the government, include Bligh House at 4-6 Bligh Street and 207 Kent Street, at the northern end of the city's growing western corridor.
But agents say the sale has hit a bump due to a dispute over valuations, which the government maintains are too low.
Charter Hall and the revamped Arena Investments, formerly Orchard Funds Management, which Morgan Stanley took over and rebranded, have been said to be the front runners in the tender process.
The two groups are willing to take on the portfolio and either on-sell the lesser quality properties or redevelop them and place them into a wholesale fund.
The sales coincide with the ongoing sale of the $1.5 billion GE Capital assets. Suggested interested parties remain Blackstone and the Hong Kong-based Pacific Alliance Group.
Mirvac is said to be interested in individual assets including 210 George Street, but analysts believe the new Mirvac chief executive Susan Lloyd-Hurwitz wants to complete her strategic review, due in May, before making large acquisitions.
Other tenders due to be awarded in the coming week are for the redevelopment of the ports at Botany and Kembla.
Nicholas Crothers, director of industrial research for Jones Lang LaSalle, said against the backdrop of the potential deals in the market, the super prime assets, industrial and office, are the ones that will have the majority of yield adjustment this year.
"The commercial property investment market is heating up. Most discussion has been about how much yields will compress this year, not if it will happen," he said.
"The majority of analysis has focused on the prime segment of the market. The Jones Lang LaSalle Research view is that further moderate yield compression for prime grade assets is likely this year; better quality assets (super prime) will see the majority of yield adjustment, resulting in wider spreads in the prime yield range and wider spreads to secondary assets."
Frequently Asked Questions about this Article…
About $2 billion of portfolio asset sales and selected properties around Australia are being touted as vendors push buyers to complete deals within the next three months ahead of the end of the financial year. Some of these properties have been on the market for months but vendors want settlements wrapped up quickly.
Roughly $300 million of NSW government properties are being sold through Macquarie Group, with Investec deputy chairman Geoff Levy running the seven-property sale as part of the government's Property Asset Utilisation Taskforce. Key assets include Bligh House at 4–6 Bligh Street and 207 Kent Street, and they are likely to be leased back to the government.
Agents say the sale has stalled because of a dispute over valuations — the government maintains some valuation offers are too low, creating negotiation friction that has slowed the tender process.
Charter Hall and the revamped Arena Investments (formerly Orchard Funds Management) have been named as front runners. Both groups are reportedly prepared to take on the portfolio and either on‑sell lower‑quality properties or redevelop them and place assets into a wholesale fund.
The ongoing sale of about $1.5 billion of GE Capital assets is progressing alongside these other disposals, with suggested interested parties including Blackstone and Hong Kong‑based Pacific Alliance Group.
Mirvac is said to be interested in individual assets such as 210 George Street, but analysts note new Mirvac CEO Susan Lloyd‑Hurwitz wants to complete a strategic review due in May before making large acquisitions.
Tenders due to be awarded in the coming week include the redevelopment of the ports at Botany and Kembla, signalling broader renewal activity in industrial infrastructure alongside the property sales.
Jones Lang LaSalle director Nicholas Crothers says the commercial property market is heating up and the majority of yield adjustment this year will fall on super‑prime, industrial and office assets. Expect further moderate yield compression for prime‑grade assets, bigger adjustments for super‑prime properties, and wider yield spreads between prime and secondary assets.
Call 1300 880 160
Start a chat
Schedule a call
