MFS has finally offloaded the office tower at 200 Queen Street, Melbourne following an approval by investors to merge with the Macquarie Direct Property Fund.
200 Queen Street is currently held in the single asset the MFS 200 Queen Street Melbourne Property Trust.
MDPML’s chief executive Richard Cutler said the merger was a positive outcome for both MDPF and QSPT investors.
He said the merger would also give QSPT investors exposure to a broader asset base with greater opportunity for regular income and capital growth, and reduced risk when compared with a single asset investment.
Investors will also benefit from improved liquidity through MDPF’s open-ended structure and investment in a range of listed property securities.
Under the arrangement MDPF will issue QSPT investors six stapled securities for every ten QSPT units held.
The sale concludes long negotiations between the parties, which included a possible sale and wind up of QSPT.
200 Queen Street has been on the market more than more than 12 months ago. The property was originally earmarked to be purchased by MDPF, but in May this year, MDPF was trumped by GE Real Estate.
However, property sources said GE Real Estate withdrew from the deal, allowing MDPF to be back in the game.
The 35-storey office tower is situated near to Melbourne’s legal precinct and MFS bought the building in 2003 from Western Australian investor Ralph Sarich for $78 million on a yield of 9%.
Shortly after the purchase, two major tenants including the Australian Broadcasting Authority and Director of Public Prosecution, which occupied a total of 6500 sqm of space vacated the building.
At the same month GE Real Estate trumped MDPF bid to purchase the property, law firm Middletons decided to relocate its offices from 200 Queen Street to the Rialto Tower at 525 Collins Street.
Middletons departure from 200 Queens Street left a gap of six to seven floors in the building.
Property sources told Australian Property Journal the top floors vacated by Middletons at 200 Queens Street are expected to be snapped up very quickly.
By Nelson Yap