GIC in joint venture to buy Australian office building for A$335m

GIC and Australian-listed property group Charter Hall on Dec 6 announced their establishment of a joint venture to acquire the 50 Marcus Clarke office building in Canberra, Australia, for A$335 million (S$322 million).

The property is a Grade A office building located in Canberra's Central Business District, with a net leasable area of 40,000 square metres. GIC and Charter Hall said the asset was built with above-market sustainability credentials, and has "access to all major amenities and transport facilities".

According to the latter's managing director and group chief executive David Harrison, the Australian government is a major tenant customer of the building, and the acquisition of the asset further increases the group's exposure to Canberra's growing office market.

The Business Times understands Australia's Department of Education, Employment and Workplace Relations is headquartered at the building.

News of GIC and Charter Hall joining forces to buy 50 Marcus Clarke first emerged in October 2021 when Australian media reported on the acquisition, which was then said to be more than A$300 million, although the final consideration had yet to be confirmed.

Online news portal Realestatesource.com.au noted in its October 2021 article that the supposed consideration of "just over A$300 million" was "much less" than the reported A$350 million guide price when the asset was listed for sale in April this year.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

According to Australian real estate agency Allhomes, the property was sold to South Korean investment group Mirae Asset Global Investments for a "record-breaking" price of about A$321 million in early 2017.

In a joint press statement on Dec 6, GIC's Asia ex-China co-head of real estate Kishore Gotety called the acquisition a "strong investment" while noting the positive performance of Canberra's market amid Covid-19, which he attributed to continued macroeconomic growth and low office vacancy.

"Going forward, we expect steady office demand, underpinned by healthy employment growth and government demand," said Gotety.

Lee Kok Sun, chief investment officer of real estate at GIC, said this acquisition will help to further diversify GIC's portfolio in key office areas across Australia, especially as it approaches the opening of its Sydney office.

READ MORE:

• GIC to acquire A$620m Australia hotel portfolio with Partners Group, Salter Brothers
• GIC and ESR Cayman to acquire Australia property portfolio for A$3.8 billion
• ESR Cayman sells 35% stake in Australian logistics investment to Singapore's GIC