The AMP Capital Wholesale Office Fund (AWOF) will acquire interest in the land and development of 200 George Street, Sydney for $317 million.
AMP Capital's head of property funds management, Chris Judd, said that as the original owner of the site, AMP Capital had previously negotiated rights to acquire a 50 per cent interest in any future development on the site.
“This transaction presents a rare development opportunity and an excellent investment outcome for our clients,” Mr Judd said.
“The acquisition is consistent with our strategy to remain focused on core, well-located office towers and bringing some newer assets into the fund to increase the quality of the portfolio and deliver our investors strong, risk-adjusted returns over the long term.”
AMP said the investment is “significantly” de-risked for AWOF investors as the tower has been pre-let to Ernst & Young for a term of 10 years from completion.
Mirvac will provide AMP Capital a rent guarantee over any remaining un-leased space at completion for a term of four years.
AMP said its AWOF portfolio has been well supported by investors, allowing the portfolio to be lowly geared and able to fund the development while still remaining within the target gear range.
