The GPT Group announced today that it had agreed to sell its 25% share in 1 Farrer Place, Sydney to Australian Prime Property Fund Commercial, a fund managed by Australian property giants, LendLease. The sale of the prime Sydney office tower will allow GPT to further refocus their portfolio towards the logistics sector, which has been having a strong year driven by the growth of online shopping.
The asset has provided GPT with a return in excess of 12% per annum over the past five years, and the sale price was set at GPT’s 30 June 2020 book value of A$584.6m.
In announcing the sale, GPT’s Chief Executive Officer Bob Johnston said, “The sale of Farrer Place capitalises on the strong demand and rare opportunity to purchase landmark office assets. The proceeds from the sale will be reinvested into new opportunities including logistics acquisitions and the Group’s development pipeline, which we believe will generate superior long term returns for investors.”
The sale comes just one week after GPT exchanged contracts for the purchase of three prime logistics properties and 2.35 hectares of adjoining development land at Drystone Industrial Estate, Truganina for a total price of A$127.6m. These properties, originally developed between 2015 and 2019, comprise a combined 44,137 square metres of warehouse and cold storage space fully leased to five tenants with a WALE of 8.2 years.
GPT has also recently commenced the speculative development of a 16,270 square metre warehouse at Berrinba in Brisbane, with completion scheduled for the second half of 2021.
Commenting on the logistics acquisitions Mr. Johnston added, “These investments are consistent with GPT’s strategy to grow our exposure to the logistics sector and complement our significant logistics development pipeline which has an expected end value of approximately A$1bn.”
The transactions are expected to settle by mid-December.