Mirvac kicks off new strategic focus with $584 million CBD office portfolio acquisition

Fresh from announcing its new strategic focus on acquiring prime office assets in the major capital cities, Mirvac has swooped to acquire GE’s seven office property portfolio for $584 million covering 83,500 square metres of office space.

It is being acquired at an initial passing yield of 7.8%.

The portfolio includes two A Grade office towers – the 90 Collins Street office tower at the Paris End of Collins Street with 21,000 square metres of office space, acquired for $170 million and the 28,000 square metre Allendale Square skyscraper in Perth, acquired for $231 million.

Allendale Square is a 32-level building with tenants include ANZ and Minter Ellison, built in 1976 and refurbished in 2002.

The 90 Collins Street tower covers 22 levels and was built in 1988, refurbished in 2011. It stands in between the iconic 101 and 120 Melbourne office towers with tenants including Westpac and VicSuper.

The five other buildings are all in Sydney: 210 and 220 George Street, 37 and 51 Pitt Street and 6-8 Underwood Street, just off George Street..

The acquisitions are being funded via a $400mn equity raising and an offer to Mirvac securityholders.

“The key properties in this portfolio are the five Sydney properties (only 31% of the portfolio) which are located next to, or in immediate proximity to Mirvac’s current office development project at 200 George Street,” notes Goldman Sachs A-REIT analyst Simon Wheatley.

“These properties, within the bounds of George, Pitt, Dalley and Alfred St’s, comprise a re-development opportunity, with 210 and 220 George St set for an initial upgrade, with potential for future site consolidation and redevelopment.

“The three properties on the corner of Pitt and Underwood St present more immediate potential for redevelopment of a 30,000sqm office building. “