In one of the shrewdest off-market property deals for 2006, unlisted superannuation fund ISPT has snapped up four yet to be completed office towers located in Canberra and Brisbane for $480.8 million from Leighton Properties.
The direct deal was completed between ISPT’s chief executive Daryl Browning and Leighton Properties managing director Vyril Vella.
The developments are located at 18 Marcus Clarke Street and 7 London Circuit in Canberra and two office towers in the Green Square multi-use precinct on St Pauls Terrace in Brisbane.
The deal takes ISPT’s property portfolio to around $4 billion.
Leighton Properties’ managing director, Vyril Vella said current appetite is particularly strong from investors for quality investments such as these and consistent with Leighton’s strategy of mitigating risk, it was an opportune time to package the properties and on sell in a single transaction.
"Leighton Properties will complete the development of the projects including both the construction and the responsibility for leasing. ISPT will fund the projects during the development period," Vella added.
Browning said that the purchases is inline with ISPT’s continued growth and diversification of its prime property portfolio around Australia.
Browning added that all four buildings will offer ISPT excellent growth, first class tenancies and returns in markets.
“We will continue our growth strategy over the next 12 to 18 month’s as strategic opportunities present themselves,” Browning concluded.
18 Marcus Clarke Street, which is being developed in joint venture with Mirvac, is a glass facaded building that is designed to both relate to nearby older buildings whilst presenting a new modern composition. The Department of Agriculture, Fisheries and Forestry will occupy all of the commercial area of the 27100 sqm building under a 15 year lease, which contains provision for two further extensions, each of five years.
7 London Circuit is a striking curved building responding to the original Walter Burley Griffin Masterplan. The glass curtain walls are topped by a dramatic floating roof that will become a signature element of the Civic landscape. National ICT Australia Limited have fully leased Building A and DAFF have pre-leased 3 of the 5 commercial floors in the second building.
Vella added that Leighton’s have contracted the construction of the two Canberra developments to Thiess who commenced work in January this year and are targeting completion in the third quarter of 2007 including the integrated fitouts for both DAFF and NICTA.
"In Brisbane, ISPT will also acquire the commercial components of Leighton Properties’ Green Square Development, an urban renewal project on a two hectare site formerly owned by the Brisbane City Council which operated as a Council Works depot," he said.
On two parcels of land totalling 9,000 sqm, acquired from the BCC, Leighton Properties are developing a 5-star Green Star environmentally rated project which includes 17,000 sqm A grade office building (South Tower) including 355 parking bays, to be leased by BCC for a 20 year term; and a second A grade office building (North Tower) up to 21,000 sqm.
"Green Square will set a new benchmark for sustainable office development in Queensland with both office towers planned to achieve 5 star Green Star rating. The South Tower leased by the BCC will have the largest floor plates in the fringe, ranging from 2,000 – 4,500 sqm NLA.“
Leighton Contractors commenced construction of the Green Square development in October 2005 and are targeting completion of the South Tower at the end of 2007. The North Tower is due for completion in early 2008.
Leighton closed up 12 cents at $17.52 yesterday.
By Ted McDonnell
