Link REIT enters into JV with Oxford in A$2.3bn Australian office venture

Link REIT enters into JV with Oxford in A$2.3bn Australian office venture
barrack Place,151 Clarence Street, Sydney

Hong Kong-listed Link REIT has entered into a joint venture with global real estate investor Oxford Properties with a 49.9% interest in the Investa Gateway Office(IGO) venture at a purchase price of A$596 million (approximately HK$3.3 billion).

The venture consists of five prime office assets in Australia’s core markets of Sydney and Melbourne worth over A$2.3 billion.

The portfolio will continue to be managed by Australia’s real estate investment manager Investa.

Link will sit alongside Oxford as a keystone investor in IGO.

Located in core locations of the global gateway cities of Sydney and Melbourne, IGO comprises five income-producing, prime grade office assets with focus in sustainability – 126 Phillip Street, 388 George Street, 151 Clarence Street and 347 Kent Street all in Sydney and 567 Collins Street, Melbourne.

George Hongchoy, Link’s Chief Executive Officer, said:

“IGO is one of the highest quality Australian office real estate portfolios to be offered to the market in 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. 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.”

Alec Harper, Oxford’s Head of Australia, said:

“Leveraging Investa’s Australian office management expertise, we have 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. 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.”

“Oxford will redeploy capital from the transaction into our prime office develop-to-core pipeline and build-to-rent develop-to-core investment strategy in Australia, where we continue to have a favourable long-term outlook.”

Penny Ransom, Investa’s Chief Investment Officer, said:

“We are excited to welcome Link as a significant, new investment partner to our 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.” 

Oxford is a leading global real estate investor, asset manager and business builder, while Investa is Oxford’s local operating and development partner across its commercial office portfolio and growing build-to-rent residential business in Australia. Through active asset management, the portfolio has been successfully de-risked by Investa and Oxford and provides diversified income, backed by high calibre tenants from a range of industries, with strong lease covenants and market leading environmental credentials. 

The transaction is expected to complete in the first half of 2022.