388 George St
388 George Street, Sydney, part of the Investa office portfolio. Image supplied.
  • Hong Kong-listed Link will own a 49.9% stake
  • Portfolio currently owns five quality office assets across Melbourne and Sydney
  • Oxford will deploy capital from transaction to drive their office and build-to-rent pipeline

The largest real estate investment trust in Asia has today announced a joint venture with Oxford Properties Group in the Investa Gateway Office (IGO) venture.

Hong Kong-listed Link Asset Management Limited’s venture with Oxford and Investa, which consists of a $2.3 billion prime office portfolio, will see Link own 49.9% with Oxford owning the remaining 50.1% interest.

The portfolio consists of five core assets across Sydney and Melbourne, with Investa managing the operations.

George Hongchoy, Link’s chief executive officer, said the IGO venture is one of the highest quality Australian office real estate portfolios to have been offered across the market over recent years.

“We are delighted to partner with two firms that have deep conviction and connections in the Australian market and further strengthen Link’s presence in the country,” he said.

“The Australian economy has been highly resilient and the investment in one of its highest quality prime office portfolios provides immediate scale, positions us strongly for the next cycle and aligns with our Vision 2025 growth strategy of diversifying and improving our portfolio mix in the region.”

George Hongchoy, Link CEO

Link’s 49.9% share equates to $596 million ( or HK$3.3 billion) with funding coming from internal cash resources and debt facilities.

The portfolio consists of 126 Phillip Street, 388 George Street, 151 Clarence Street and 347 Kent Street all in Sydney, along with 567 Collins Street, Melbourne.

567 Collins St
567 Collins St, Melbourne. Image supplied.

Oxford de-risking portfolio

Oxford’s head of Australia, Alec Harper, added that by leveraging Investa’s Australian office management expertise, the team has created significant value and achieved a high performing de-risked portfolio.

“Following on from the recent investment by Mitsubishi Estate into our Parkline Place project, today’s transaction further demonstrates the continued global institutional demand for prime and highly sustainable office product,” said Mr Harper.

“The deal demonstrates Oxford’s and Investa’s ability to attract partner capital and crystallises the value created by each of our teams. We look forward to partnering with Link on this venture.”

Alec Harper, Oxford Head of Australia

He added that Oxford will redeploy capital from the transaction towards their prime develop-to-core office pipeline, along with build-to-rent developments. Their outlook for this investment strategy remains strong.

126 Phillip St
126 Phillip St, Sydney. Image supplied.

Investa chief investment officer Penny Ransom said the team were excited to welcome Link as a new partner to their platform.

“To attract a partner of Link’s calibre reflects the quality of the IGO portfolio and the strong synergies that exist between our businesses. Link and Oxford’s global investment track record, together with Investa’s leading investment and asset management expertise, will underpin the future performance of the venture.”

As Link’s appointed local partner, EG brokered the local deal, the second in four months for Link.

Sean Fleming, EG’s head of capital transactions, said securing exposure to the high end of the Australian office market is a timely strategic move for the REIT.

“EG has identified these towers as breakaway investment opportunities, resilient to the pressures of COVID because they meet tenant demand for high-quality, hybrid and healthy work environments,” he said.

CBRE’s Greg Hyland, Stuart McCann and Flint Davidson also assisted with the transaction, which is expected to be completed during the first half of this year.

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