AMP Capital Investors has purchased a Melbourne CBD office property at 330 Collins Street for $107 million on behalf of Sunsuper, taking the number of properties acquired under its direct property portfolio mandate to five.
Located in the commercial and retail heart of Melbourne’s CBD, 330 Collins Street comprises approximately 18,337 sqm of A-Grade office space over 20 levels, including 18 office floors, extensive retail accommodation, ground floor foyer, plus two basement floors. The building underwent significant refurbishment in 2003.
AMP Capital Portfolio Manager Damian Fitzpatrick said AMP Capital saw an opportunity for Sunsuper to acquire a property that met its investment criteria in both geographical location and projected income returns, with the asset to benefit from the longer term rental growth forecast for the Melbourne CBD office market in the coming five years.
“Demand for quality office space in Melbourne’s CBD is increasing due to less development activity as a result of the financial crisis,” said Mr Fitzpatrick.
“With Melbourne’s commercial office market well positioned for growth, due to low vacancy and a strengthening in market conditions, the property will offer Sunsuper ongoing positive returns and afford tenants extensive prime retail frontage at a time when commercial vacancy rates are decreasing.
“330 Collins Street is a quality asset and one of the best located office buildings in Melbourne. The property is currently 100 per cent leased to a range of high quality tenants. With large office floor-plates for this location, combined with its substantial retail frontage, AMP Capital’s asset management team believe significant value can be unlocked for Sunsuper to deliver strong investment performance.”
Sunsuper’s Chief Executive Officer Tony Lally said Sunsuper placed significant emphasis on diversification within its investment portfolios – a strategy which had served members well over both the short and longer term.
“This addition to our growing property portfolio in the Melbourne office market offers excellent prospects for returns for our members. We are particularly pleased to have been able to purchase such a high quality asset in this key Melbourne CBD location.”
Mr Lally said the purchase also complemented Sunsuper’s national growth strategy.
“This property at 330 Collins Street, along with our recent purchase of 35 Clarence Street in Sydney, is a great fit for Sunsuper in terms of quality and location. We’re confident that our members will benefit from future growth and strong tenant demand in both the Melbourne and Sydney CBDs as a result of these acquisitions,” he said.
According to CB Richard Ellis’ latest Melbourne CBD office report, no large office buildings are expected to come on the market in Melbourne’s CBD for three years, while demand from tenants will continue to remain strong.
AMP Capital’s Property Portfolio Service was established more than 15 years ago and specialises in building bespoke real estate portfolios for clients. Portfolios may include a range of products such as Australian and international direct property, listed property and development funds, Australian wholesale and offshore funds as well as emerging products under an ‘alternative property’ allocation.
