Investa Office Fund declines half-stake in Melbourne office building

Directors of the ASX-listed Investa Office Fund have decided not to exercise a call option to acquire a 50% interest in 242 Exhibition Street, a 42-storey office building in the Melbourne CBD.

The option was granted by the fund’s holding company Investa, Property Group, and expired at midnight on September 30, 2011.

Investa Property Group jointly owns 242 Exhibition Street in conjunction with the Investa Commercial Property Fund.

While the fund says the qualities and characteristics of the property are complementary with the strategy of “repositioning the portfolio to core Australian CBD office markets”, its immediate capital priorities are to execute the unit buyback and dispose of the offshore property assets, both of which it says are progressing well.

The Exhibition Street A-grade building is worth about $425 million.

It has 65,913 square metres of net lettable area and an average floor size of 1,400 square metres. The building’s major tenant is Telstra.

Investa Office Fund holds a $2.6 billion portfolio of investment grade office buildings in core CBD markets in Australia and selected offshore markets in the US and Europe.