Challenger Diversified Property Group (CDI) announced it has contracted to acquire a Melbourne A-grade CBD office building located at 31 Queen St Melbourne for $81.0 million (excluding stamp duty and other transactions costs).
CDI Fund Manager Trevor Hardie commented: “With an equivalent yield of 8.17%, the acquisition of 31 Queen St represents a major step in our portfolio enhancement strategy aimed at improving the quality of CDI’s cash flow. The acquisition follows on from the successful sale of four properties since mid-2010 at an average sale price premium above valuation of 11%1. “This acquisition will enhance the quality of CDI’s portfolio by providing Melbourne CBD exposure, lifting asset quality, and supporting diversification of income with reduced reliance on single-tenanted occupancies.”
31 Queen St is located on the corner of Flinders Lane within the financial precinct of the Melbourne CBD, specifically in the Western Core section. With 27 levels comprising office, ground floor retail and five levels of parking for 172 cars, 31 Queen St was built in 1976 with $13.7 million spent over the past four years on building upgrades. Covering a net lettable area of 19,213 sqm, the building is tenanted by seventeen organisations including Oxiana Limited, Defence Credit Union, Hyder Consulting, and Gabstaff.
CDI provides investors with exposure to a diversified portfolio of quality, well located properties which offer stable income returns and potential for capital growth. With total assets of $781 million at 31 December 2010, CDI holds investment interests in 29 office, industrial and retail properties located in Australia and France. In addition, CDI holds a cumulative 25 year leasehold interest in Sydney’s Domain car park.