Mirvac moves on 275 Kent Street Sydney

Mirvac Group (ASX: MGR) has taken control of the Westpac headquarters at 275 Kent Street Sydney, highlighting the strength of the Sydney CBD office market. Mirvac has acquired Blackstone’s 50% interest in the office tower for $721.9M and assigned the ownership rights to ISPT as its investment partner. Blackstone had placed its 50% ownership on the market in January, with Charter Hall Group (ASX: CHC) emerging as the preferred bidder. However Mirvac’s exercise of its pre-emptive rights allows it to acquire Blackstone’s interest and assign the rights to ISPT who will co-own the office tower with Mirvac.

The premium 76,452sqm office tower was completed in 2006, with Mirvac acquiring it in 2010 and selling a half stake to Blackstone in 2014 for $435M. The $721.9M sale price equates to around $850M for the 50% interest after taking into account planned additional spending on the tower and retail plaza, representing a yield of less than 4.5%. The price highlights the strength of the Sydney CBD office market with valuations expected to remain strong during the June reporting period. Mirvac had last valued its 50% interest at $555M in December 2017 on a 5.13% capitalisation rate.