CapitaLand Investment acquires Melbourne office tower

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CapitaLand Investment has acquired a 22-storey office tower in Melbourne, Australia’s central business district (CBD) for its regional core-plus fund CapitaLand Open End Real Estate Fund (COREF), the real estate investment manager (REIM) said in a filing to SGX Tuesday.

The acquisition is CapitaLand Investment’s fifth in Australia within six months, but it marked COREF’s first in the country, the filing said. COREF has acquired four assets in Asia Pacific, with total investment amounting to around US$900 million since its August 2021 founding, the filing said.

“Australia is one of CLI’s focus markets where we see significant potential for growth,” Paul Toussaint, managing director for Australia, said in the statement. He noted CapitaLand Investment has invested around A$1.5 billion in five assets over the past six months in the country, with the assets held via private and listed funds.

“In view of the post-Covid recovery and companies’ steady return to work, we believe that the Australian office market is showing signs of growth that will overcome the near-term challenges of vacancy and tenant incentive levels,” Toussaint said.

Kevin Chee, managing director for private funds at CLI, said COREF’s acquisitions focus on themes including regionalisation/decentralisation, emerging locations, evolving workspace solutions, digital economy and sustainability.

“COREF’s entry into Australia is in line with its strategy of building geographic exposure to institutional grade, income-producing assets across developed markets in Asia Pacific early on before diversifying into other sectors,” Chee said in the statement.

The office property, located at Melbourne’s 120 Spencer Street, is opposite the Southern Cross Station, a major public transport hub, the filing said, noting the property’s occupancy was at 97.5 percent. Tenants at the property include WeWork, Central Queensland University and Redhill Education, the filing said.