Investa Commercial Property Fund to buy half of 120 Collins in Melbourne CBD

The unlisted Investa Commercial Property Fund (ICPF) is set to acquire half of 120 Collins Street, one of Melbourne’s most recognisable office towers, from its fund manager, Investa Property Group.

The fund will use the proceeds of a $110 million capital raising due to be completed this week as well as equity commitments of $175 million received earlier in the year to acquire 50% of 120 Collins Street for about $255 million, with the remaining $30 million to be spent on increasing its stake in 400 George Street in the Sydney CBD by 5.1% to 25%.

The Investa Property Group will retain 50% ownership of the office tower.

The investments will increase total assets under management in the fund to more than $1.6 billion.

Rising up 50 levels, 120 Collins Street Melbourne is a premium-grade office building with panoramic city skyline views and a total net lettable area of 64,831 square metres. It is at the “Paris end” of Collins Street with retail tenants including Louis Vuitton, Rolex and Armani. 

The office tower has been held by Investa since its 2003 when it acquired it at part of takeover of the BT Office Trust. 

In 1993, BT Office Trust paid $286 million to buy 120 Collins Street from the Grollos family (now Grocon). 

Located on the corner of George and Kings Street, 400 George Street is an A-grade office building with 51,222 square metres of net lettable area. 

ICPF fund manager Peter Menegazzo says the ability to access “quality assets” was a major factor in attracting the capital. 

“We were seeking to make a strategic acquisition in the Melbourne CBD, and are now set to acquire an interest in one of Melbourne's best buildings, in this very tightly held market,” he says. 

Menegazzo says both new and existing investors based locally and offshore participated in the capital raising.

The fund will seek to raise new equity in 2012 to fund further acquisitions.