AMP Capital’s Wholesale Office Fund (AWOF) has agreed to acquire 100 per cent of 700 Bourke Street, Melbourne, from Cbus Property for A$433.5 million.

An A-grade asset with premium-grade services, 700 Bourke Street was completed in 2013 and is regarded as the new gateway to the city’s Docklands precinct.

Situated next to Etihad Stadium and Southern Cross Railway Station, 700 Bourke Street features more than 63,000 square metres (sqm) of office accommodation, 770sqm of retail space, a child care centre, auditorium, outdoor terrace and a two-level car park. The building is targeting a 5-Star NABERS Energy rating and a 6-Star Green Star rating.

AMP Capital Wholesale Office Fund Manager Nick McGrath said: “The acquisition is consistent with our strategy to acquire modern, prime office assets in the major Australian CBD markets and is a further example of AWOF recycling capital out of non-core assets into core assets.

“700 Bourke is a key acquisition and an excellent fit for AWOF. Not only is it an iconic building of architectural significance, it will improve the overall quality of the portfolio and give our investors greater exposure to the Melbourne market via an asset that will provide a strong and growing cash flow over the long-term.”

Following the acquisition AWOF’s exposure to the core office markets of Melbourne and Sydney will increase to 93 per cent and, over a ten-year period, 700 Bourke Street will deliver an average income yield of 7 per cent.

Mr McGrath added: “The addition of 700 Bourke to the portfolio and the completion of 200 George Street Sydney in 2016 will ensure AWOF is viewed as a contemporary, high quality portfolio of prime office buildings capable of meeting and shaping the evolution in modern workplaces.”

The purchase price represents a rate per square metre of $6,700, which is below recent comparable transactions in the Docklands, said Mr McGrath. The acquisition will be funded initially through a new debt facility, with AWOF to then undertake a capital raising over the coming months.