KUALA LUMPUR: National fund management company Permodalan Nasional Bhd (PNB) has inked the biggest property deal in Australia for the year, following the sealing of a deal to purchase Santos Place in Brisbane for around A$290 million (RM838.19 million), according to news reports Down Under.
“The purchase is the largest single property to change hands in Australia since South Korea’s National Pension Fund picked up Aurora Place in Sydney for A$685 million late last year,” reported The Australian Financial Review.
“The sale reflects a price per sq m of about A$8,200 which pips the sale of the half share in Charter Hall’s 275 George Street to K-REIT Asia (Australia) Trust for about A$8,000 per sq m,” it added.
The property is a 37-storey tower with 34,700 sq m and is the largest six-star environmentally rated building in Australia. It is located at 32 Turbot Street, which had opened in August last year.
According to the Australian news report, the building has more than 40% of the space leased to Australian oil and gas exploration and production group Santos.
The news report added that PNB beat off competition to buy the building from listed Commonwealth Property Office
Fund.
It is understood that the building, owned by Nelson Properties, is PNB’s first acquisition Down Under. Questions furnished to PNB on this matter were not answered at press time.
Demand for office space in Australia has recovered recently.
According to data from the country’s Property Council, about 333,000 sq m (3.6 million sq ft) of office space was leased in the six months to July, compared with the 20-year average of 171,000 sq m.
Even so, for the second quarter of this year, the average prime rent in the Brisbane central business district (CBD) fell slightly, down 1.3% to A$710 per square metre per year, according to DTZ Research Australia — a company in the real estate industry.
“Looking forward, we expect rents to begin stabilising during 2010, shifting towards gradual growth from 2011,” it said.
According to Property Council of Australia, Brisbane’s CBD office vacancy rate has fallen from a 15-year high of 11.3% in January this year to 10.9% in July.
Property Council of Australia Queensland executive director Steve Greenwood said in a recent press release that this decline was driven by healthy demand, particularly for A Grade space.
“Whilst this is a positive sign that the Brisbane CBD office market may have turned the corner, Brisbane remains well above the national capital city average vacancy rate of 8.9%,” he noted.
“Canberra is currently the only capital experiencing a higher vacancy rate than Brisbane with both Sydney and Melbourne below the national average,” he said.
Interestingly, Greenwood said the performance of Brisbane’s CBD office market has varied widely over different grades of space.
“Vacancy increased for the Premium and D Grade sectors over the six months to July. Over the same period, A and C Grade stock experienced positive net absorption, and B and D Grade stock experienced negative net absorption,” he said.
“With approximately 38,000 sq m of space due to enter the market in the second half of this year, the big question is whether or not this strong demand will continue and prevent a possible reversing of this recent positive trend,” he added.
If the Australian news reports on PNB’s latest property buy Down Under is true, it’ll be interesting to see what exactly the plans of the local fund are, moving forward.
Is this the start of more investments in Australia?
PNB was incorporated in 1978 as a pivotal instrument of the New Economic Policy to promote share ownership in the corporate sector among bumiputeras and to develop opportunities for bumiputera professionals to participate in the creation and management of wealth.
by Joyce Goh
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