AMP Capital Wholesale Office Fund (AWOF) has entered into an agreement with Mirvac Group to acquire a 50 per cent interest in the land and development of 200 George Street, Sydney for $317 million.
One of the most exciting developments in a prime Sydney CBD location, the building offers views of Sydney Harbour Bridge and the Opera House and will incorporate a number of design features that seek to demonstrate excellence in sustainability.
The premium grade, 37 storey office tower has been substantially pre-let to Ernst & Young for a term of 10 years from completion. Mirvac will provide AMP Capital a rent guarantee over any remaining unleased space at completion for a term of four years, significantly de-risking the investment proposition for AWOF investors.
AMP Capital Head of Property Funds Management Chris Judd said as the original owner of the site, AMP Capital had previously negotiated rights to acquire a 50 per cent interest in any future development on the site.
“This transaction presents a rare development opportunity and an excellent investment outcome for our clients.
“The acquisition is consistent with our strategy to remain focused on core, well located office towers and bringing some newer assets into the Fund to increase the quality of the portfolio and deliver our investors strong risk adjusted returns over the long term.
“We are pleased to further build upon our relationship with Mirvac Group where we benefit from partnering with a well-regarded residential and commercial developer,” said Mr Judd.
Mirvac CEO and Managing Director Susan Lloyd-Hurwitz said: “We are delighted to have AMP Capital as an aligned partner in 200 George Street for what will be a landmark premium grade asset, located in the financial and legal core of the Sydney CBD. This agreement further strengthens our relationship with AMP Capital and we will continue to look to work with them in future residential and commercial opportunities.”
AWOF has been well supported by investors over the last few years allowing the portfolio to be lowly geared and able to fund this development while still remaining within the target gearing range.
The AMP Capital Wholesale Office Fund is an open-ended unlisted trust investing in high-quality office buildings in Australia and New Zealand. The Fund has assets of $2.8 billion as at 30 December 2012.