Lawyers are saying that the high Australian dollar and a wary global economy have not deterred Australian commercial real estate sales as the latest is set for completion in coming weeks. Freehills partner Julie Couch and executive counsel Alicia Albury have been advising ANZ on the sale of its Martin Place building in Sydney to U.S.-based buyer Pembroke Real Estate, and contracts were exchanged last week.
The sale will facilitate ANZ’s planned move to the ‘Shift2013’ project, now underway in Castlereagh Street. The building was sold for an undisclosed sum and is expected to complete subject to various contractual terms and conditions being met. Baker & McKenzie partner Caroline Ho led the team advising Boston based Pembroke.
Australian commercial property is holding its own value for international investors in turbulent times. Earlier this year K-REIT purchased a 50 percent interest in another Sydney property, 8 Chifley Square, and Pramerica spent $A130 million on a 50 percent stake in Transport House, 595 Collins Street, sparking a Fairfax Media headline proclaiming the district ‘The U.S. end of Collins Street’. Couch also noted that the interest from United States investment firms is a surprise. “Asian and European, even German funds have already been looking at Australia but the fact we’ve seen another U.S. purchaser is a little bit novel,” she said.
Interest from the United States and Asia doesn’t appear to be dwindling either. “The market is quite surprising. If you had asked me six, or even twelve months ago, I would have said that the rising Australian dollar would have affected the level of interest in property investment,” said Couch. “What has drawn the interest in Australia is the stability of the local market. Foreign entities that would have put their money somewhere else are attracted to Australia for the value, long term outlook and rental growth they can still get.”
The ANZ transaction was subject to a competitive bidding process and there were a number of offshore players keen to establish businesses here, according to Couch - this will be Pembroke’s first Australian investment.
