Canadian group buys Myer headquarters

Myer has sold its Docklands headquarters in Melbourne to Canadian group Manulife
Myer has sold its Docklands headquarters in Melbourne to Canadian group Manulife

Manulife Real Estate, the global real estate arm of Canada’s biggest insurer, Manulife Financial, has bought Myer’s headquarters at Victoria Harbour in the Docklands for close to $300 million.

The asset was sold by the unlisted Australian Prime Property Fund Commercial, managed by Lendlease, and Savills Investment Management, for one of its global mandates, and will see Manulife become the owner of 800 Collins Street.

The deal, struck on a yield of about 5.15%, was flagged by The Australian in November and was in keeping with a run of recent transactions in the Docklands precinct in Melbourne.

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The A-grade office complex was marketed by JLL’s Langton McHarg, Paul Kempton and Rob Sewell, and Savills’ Ian Hetherington, Simon Fenn and Ben Azar, with stiff bidding from global and local institutions.

“Melbourne continues to increase its global importance as a high-performing business destination, as demonstrated by the strong interest this asset received, and we are very pleased with the outcome for our investors,” Josh McHutchison, managing director of Lendlease Investment Management, says.

“The sale of 800 Collins St continues the fund’s portfolio rebalancing strategy to focus on flexible and sustainable precincts that benefit from excellent transport links and access to public green space.”

Built in 2010, the complex has 28,619sqm of office space over 10 levels and 873sqm of retail space, plus two levels of parking.

Bovis Lend Lease developed the complex for APPF Commercial and European funds giant SEB Asset Management, which was taken over by the Savills investment unit in 2015.

The building is occupied by both Myer and Latitude Financial Services.

Winning the lending group as a tenant boosted the building’s weighted average lease expiry to about six years.

Savills Investment Management’s Australian head of investment, Lee Tredwell, says the sale was the “culmination of the joint owners actively repositioning the asset to attract a new high profile tenant on a long-term lease and in turn creating a multi-tenanted building with a longer weighted average lease expiry that would appeal to core investors”.

Manulife prevailed after tying up with Lendlease, which will retain a role in managing the asset.

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