A non-traded REIT sponsored by Hines, Hines Global REIT, announced that it has acquired a Class A office building in Melbourne, Australia.
The property, 818 Bourke, was purchased from GPT Funds Management 2 Pty Limited for a contract purchase price of $152.5 million AUD (approximately $135.7 million USD assuming a rate of $0.89 per AUD as of the transaction date), exclusive of transaction costs. GPT Group is one of Australia’s largest publicly traded REITs. Hines Global funded the purchase with proceeds from its revolving credit facility and a $91.5 AUD (approximately $81.4 million USD) mortgage loan with Australia and New Zealand Banking Group Limited.
The eight-story office property contains 251,038 square feet of rentable area and was constructed in 2007. It is 98% leased to ten tenants, three of which are office tenants that include AMP, Ericsson Australia, and Infosys. The property utilizes sustainable design and has earned a 5.5-star NABERS water rating and a 5-star NABERS energy rating. In addition, the building has unobstructed water views.
Sherri Schugart, President and CEO of Hines Global REIT, commented, “We are attracted to this opportunity due to the project’s desirable location in the Docklands, recent construction, and institutional quality tenant base that offers a strong credit profile. 818 Bourke will complement our existing Australian portfolio and provide Hines Global REIT with its first asset in Melbourne.”
David Warneford, Managing Director of Hines in Sydney, added, “The acquisition of 818 Bourke provides Hines Global REIT with a very high-quality asset in one of Melbourne’s strongest performing office markets. The large floor plates, excellent environmental credentials and unobstructed views across Victoria Harbour are expected to help to attract and retain high caliber tenants.”
Launched in 2009, Hines Global REIT owns interests in 42 real estate investments in the United States and internationally. The REIT owns four other properties in Australia; 144 Montague and 825 Ann in Brisbane, 100 Brookes Street in Fortitude Valley, and 465 Victoria in Sydney.
According to MTS Research Advisors, Hines Global REIT has equity of about $2.7 billion and invested assets of $4.4 billion through the end of June 2014. The REIT is closed to new investors.