CapitaLand Investment acquires 22-storey office tower in Melbourne’s CBD
The acquisition marks CLI’s fifth investment in Australia within six months
SINGAPORE, June 7, 2022 /PRNewswire/ — CapitaLand Investment Limited (CLI) has acquired a freehold office tower in the western heart of Melbourne’s central business district for its flagship regional core-plus fund, CapitaLand Open End Real Estate Fund (COREF). This acquisition marks CLI’s fifth investment in Australia within six months. This is COREF’s first acquisition in Australiaand his fourth in Asia Pacific with a total investment of approximately $900 million since the creation of the fund in August 2021.
The 22-story office building, 120 Spencer Street, has a net leasable area of 32,000 square meters (m²). The property is strategically located opposite Southern Cross Station, a major public transport hub that connects to the greater Melbourne area, with intra-city tram lines on its doorstep. It also benefits from the recent revitalization of Western Core, led by the development of the Docklands district, the addition of new premium office towers, the refurbishment of existing assets and the migration of tenants, including many significant occupants, to the neighborhood.
M Paul Toussaintgeneral manager of AustraliaCLI, said: “Australia is one of CLI’s target markets where we see significant growth potential. CLI has invested approx. 1.5 billion Australian dollars in five of the country’s quality assets held through its private and listed funds over the past six months. 120 Spencer Street is CLI’s latest offering in Australia, sourced and executed by our experienced local team. Given the post-COVID recovery and businesses steadily returning to work, we believe the Australian office market is showing signs of growth that will overcome the short-term challenges of vacancy levels and tenant incentive. . 120 Spencer Street is well positioned to take advantage of this given its strong WALE, vibrant location benefiting from the rejuvenation of the area and potential for improvements. »
M Simon TracyCEO of Private Equity Real Estate, Real Assets, CLI, said, “Leveraging CLI’s deep expertise and extensive network in the Asia Pacificwe continue to grow COREF’s portfolio with high-quality assets in the hub cities of Japan, Singapore and now Australia. The Australian office sector presents relative value, and our highly experienced local team was able to capitalize on the window before the post-COVID recovery to seize this opportunity. CLI takes a disciplined approach to finding assets that offer value to investors. With ESG principles at the core of our investment process, we will continue to actively enhance our asset portfolio to generate quality returns for our stakeholders.”
Build a diversified portfolio of quality assets for COREF
M Kevin CheeManaging Director, Private Funds, CLI, said: “COREF’s acquisitions align with its focus on the key investment themes of regionalization/decentralization, emerging locations, evolving workspace solutions, the digital economy and sustainability. COREF’s entry into Australia is consistent with its strategy of building geographic exposure to institutional-grade income-producing assets in developed markets by Asia Pacific very early on before diversifying into other sectors.”
120 Spencer Street has a strong office occupancy rate of 97.5% and a weighted average lease term (WALE) of 6.7 years. Its tenant base includes WeWork and major local educational institutions such as Central Queensland University and Redhill Education. Longer term, the property has strong intrinsic value given its prime island location with three street frontages and a potential 22,000m² of unused gross floor area. Over the past five years, the property has suffered 30 million Australian dollars upgrades, including the recent installation of energy-efficient mechanical and engineering equipment. Since November 1, 2021, 120 Spencer Street runs entirely on green electricity and is committed to doing so for the next 10 years. It has also received the NABERS (National Australian Built Environment Rating System) Energy 4-Star and NABERS Water 5.5-Star certifications.
CLI’s strong presence in several asset classes in Australia
CLI has a diversified portfolio of approximately 6.9 billion Singapore dollars of assets under management in Australia, comprising office, business space, logistics and accommodation assets in eight cities. CLI Australia currently manages 36 logistics properties and business parks, and two Class A office buildings. Following the completion of the acquisitions of the 120 Spencer Street office tower and the integrated development at 101-103 Miller Street, North Sydney, which includes an office tower and the Greenwood Plaza retail componentCLI Australia will add two more offices and a shopping center to its assets under management.
CLI’s wholly owned accommodation business unit, The Ascott Limited (Ascott) and its hotel trust, Ascott Residence Trust, has approximately 150 serviced residences, co-living properties and hotels with approximately 13,000 units in Australia. On June 2, 2022Ascott announced the acquisition of its first lyf-branded coliving property in sydneylyf Bondi Junction Sydney, via Ascott Serviced Residence Global Fund. At the same time, Ascott opened its first lyf property in Australialyf CollingwoodMelbourne.
 NABERS is a national rating system that measures the environmental performance of Australian buildings and tenancies, initiated by the New South Wales Department of Planning, Industry and the Environment on behalf of the Federal Governments, States and territories of Australia.
 As of March 31, 2022. Excludes CapitaLand Integrated Commercial Trust’s (CICT) 50% interest in an integrated development, which is pending legal completion.
 Acquisition announced by CICT on December 23, 2021.
 Ascott established the US$600 million Ascott Serviced Residence Global Fund in July 2015 through a 50/50 joint venture with the Qatar Investment Authority.
About CapitaLand Investment Limited (www.capitalandinvest.com)
Based and listed at SingaporeCapitaLand Investment Limited (CLI) is a leading global real estate investment manager (REIM) with a strong Asia anchoring. Like a March 31, 2022CLI had about 124 billion Singapore dollars real estate assets under management, and approximately 86 billion Singapore dollars of real estate funds under management (FUM) held via 6 sicafi and listed real estate investment funds, and 29 private funds through Asia Pacific, Europe and UNITED STATES. Its diversified real estate asset classes span integrated developments, retail, office, hospitality, business parks, industrial, logistics and data centers.
CLI aims to scale its FUM and fee-based revenue with its full suite of investment management and operations capabilities. As the publicly traded investment management business arm of CapitaLand Group, CLI has access to the development capabilities and pipeline investment opportunities of CapitaLand’s development arm. Being part of the well-established CapitaLand ecosystem sets CLI apart from other REIMs.
As part of the CapitaLand group, CLI places sustainability at the heart of what it does. As a responsible real estate company, CLI contributes to the environmental and social well-being of the communities where it operates, as it delivers long-term economic value to its stakeholders.
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Issued by: CapitaLand Investment Limited (Co. Regn.: 200308451M)
Admission and listing of CapitaLand Investment Limited on the Singapore Stock Exchange Securities Trading Limited was sponsored by JP Morgan (SEA) Limited. JP Morgan (SEA) Limited assumes no responsibility for the content of this announcement.
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