Foreign investment in Australia’s property market was worth $16.6B this year. Three new noteworthy deals have just been announced.
As Australia’s property market continues to soar, there have been several noteworthy real estate deals reported of late.
A retail center joint venture valued at over $530 million was established by the Singaporean wealth fund, GIC Pte.
The US private equity giant Blackstone acquired a substantial stake in an office tower in Sydney, while also reviving a takeover bid for Crown Resorts.
CapitaLand Integrated Commercial Trust bought two well-located Grade-A buildings in Sydney.
All in all, foreign investment has hit a whopping $16.6 billion this year, with offshore groups lapping up office towers, shopping malls, hotels and warehouses.
$530M Retail Center Joint Venture in Canberra
Earlier this month, GIC and the Australian-listed property group, Charter Hall announced a $530 million joint venture to buy an office building in Canberra.
The Grade A property is located at 50 Marcus Clark in the capital’s CBD and has, according to the group, access to all major amenities and transport facilities.
Australia’s Department of Education, Employment and Workplace Relations has its headquarters in the building, which has a net leasable area of 40,000 square meters.
GIC has commented on the positive performance of Canberra’s property market, despite the pandemic, and thus believes that the acquisition is a “strong investment.”
The Singaporean group hope that the joint venture will help the group diversify its portfolio in key areas of Australia.
GIC plans to soon open an office in Sydney.
Blackstone Buys in Sydney, Bids for Casino
The private equity group Blackstone was named as the foreign investor that grabbed a 50% share in the Sydney Grosvenor Place Tower. The Sydney Morning Heralds reported that Blackstone paid $925 million for the deal.
Blackstone received a stamp of approval for its investment after the Australian Taxation Office signed a 10-year rental contract to occupy nine floors of the 44-storey tower. Grosvenor Place is now 99% occupied and is undergoing a multimillion-dollar refurbishment to incorporate new wellness features.
The 50% stake was bought from the Australian real estate group, Dexus. A previous bid by the sovereign wealth fund China Investment Corporation to acquire a stake in the property fell through after CIC abandoned its intents.
Last month, a bid for $6.2 billion was made by Blackstone for one of the biggest operators in Australia, Crown Resorts Ltd. The deal makes more sense since Australia put a stop to real money online casinos. This pushed gamblers back to land operators. This assuaged a previous offer as a major rival contender has been plagued by regulatory issues.
This is Blackstone’s third attempt to buy Crown Resorts, after the Australian casino giant rejected its previous bids from March and May. The revived offer comes just week after regulators placed Crown under government supervision in an attempt to stamp out money laundering and other illegal activities at the casino.
Earlier this month, Blackstone – which already owns a little under 10% of Crown – said in a statement: “Any acquisition of Crown by Blackstone would be conditional on Blackstone receiving final approval from the casino regulators in Victoria, New South Wales and Western Australia.”
CapitaLand Buys Two Office Buildings in Sydney
Two Sydney office buildings were recently acquired by CapitaLand Integrated Commercial Trust Management from CLA Real Estate Holdings.
The two Grade A office buildings are located in Sydney’s central business district. The first is at 66 Goulburn Street and the second at 100 Arthur Street.
CapitaLand, considered one of Asia’s largest diversified real estate groups with its headquarters in Singapore, has already entered the property market in Germany, but the Sydney deal is its first acquisition in Australia.
The deal is expected to be completed by the second quarter of the coming year and is valued at $381 million.
The chairman of CIC, Teo Swee Lian said in a statement: “The acquisition will allow CICT to gain a foothold in Australia, one of Asia Pacific’s largest developed markets, and open CICT to more opportunities to drive growth. We are also pleased to be investing in Sydney, which is striving to become a climate leader under its Sustainable Sydney 2020 community plan.”
The acquisition will raise CICT’s overall portfolio property value to $22.4 billion.