A summary of the transaction is outlined as follows:
Mirvac commenced construction on 699 Bourke Street in August 2013, with completion expected in 2015. The asset is fully leased to AGL for an initial minimum period of 10 years. The office tower will sit above Southern Cross Station and front Bourke Junction in Melbourne, and will have a total net lettable area of approximately 19,000 square metres, with typical office floors being approximately 2,600 square metres. The new A-Grade building is designed to achieve a 5 Star NABERS energy rating and a 5 Star Green Star rating.
Mirvac’s CEO and Managing Director, Susan Lloyd-Hurwitz, said, “699 Bourke Street, Melbourne is a great seed investment for the Alliance, and TIAA-CREF will benefit from Mirvac’s integrated platform and its ability to source, develop and manage quality office assets in prime CBD locations. We have also significantly de-risked the asset, with 100 per cent of the building pre-leased to AGL for a 10 year term. This is an excellent start to a successful strategic office partnership.”
TH Real Estate, the global joint venture between TIAA-CREF and Henderson Global Investors, will manage the Australian Office Alliance on behalf of TIAA’s General Account.
Phil McAndrews, Head of the Americas at TIAA-CREF commented, “The acquisition by TIAA’s General Account of a 50 per cent interest in the 699 Bourke Street office located in the Melbourne CBD fits our strategy of owning well-located, well-leased office properties in the world’s most attractive real estate markets. The fund-through structure is particularly appealing in a competitive market where securing high quality investments at attractive yields is challenging. This acquisition follows the successful launch earlier this month of TH Real Estate which will target core and value-add investment opportunities throughout the Americas, Asia and Europe. Through this new platform, TIAA looks forward to pursuing other attractive investment opportunities with Mirvac.”