Singapore's Keppel buys into Macquarie Park

Singapore's Keppel REIT has bought three office towers at Macquarie Park in Sydney's north-west from Goodman Group in a $306 million deal as momentum grows for offshore investment in commercial real estate despite the COVID-19 slowdown.

The acquisition of Pinnacle Office Park, a three-building cluster within Macquarie Park, was struck on a 5.25 per cent yield. The buildings comprise a total of 35,132 sq m.

"The acquisition of Pinnacle Office Park is in line with our active portfolio optimisation strategy to improve Keppel REIT's income resilience and portfolio yield," said Paul Tham, chief executive of the Singapore-listed property trust's manager.

"The expansion into the grade A metropolitan office space strengthens our portfolio as it complements our prime CBD offering.

"In the wake of COVID-19, we believe demand in Australia for quality and well-networked metropolitan locations, such as Macquarie Park, will increase as more companies seek cost-effective solutions or adopt a hub-and-spoke business model for office locations."

The Pinnacle estate is home to big corporations including gaming machine manufacturer Aristocrat, Japanese multinational technology company Konica Minolta and retailer Coles. The property includes a childcare centre, gym, end-of-trip facilities and cafe.

The Macquarie Park deal, foreshadowed last month in The Australian Financial Review, comes amid a steady increase in office-sector investments and offerings as market players adjust their expectations in the wake of the coronavirus disruption.

The tally of towers in the market is steadily mounting, with as much as $6 billion in major towers on offer in Sydney alone. Among them, the country's largest office landlord, Dexus, has increased its offering of a stake in the $2 billion-plus Grosvenor Place from 25 per cent to 50 per cent. One of the building's co-owners, Chinese Investment Corporation, is leading the charge for that stake.

Fund manager Charter Hall is also testing the market, offering its landmark tower at 9 Castlereagh Street for sale for about $400 million.

In Melbourne, Dexus this month sold a 22-level A-grade tower in the CBD, in a deal worth more than $450 million, to German investor Deka Immobilien.

Interest is also increasing for a 25 per cent stake in 80 Collins Street, which Dexus owns alongside its wholesale property fund. In the near-$1.5 billion acquisition last year of the office and hotel development at the Paris end of Collins Street, Dexus' balance sheet took on 75 per cent initially, with the intention of selling down a portion of that stake.