By Cameron Jewell
24 September 2013 — AXA Real Estate and Eureka Funds Management have paid $168 million for the Australia Post headquarters in Strawberry Hills, Sydney, which is currently being redeveloped to achieve a 5 star NABERS rating.
The NABERS energy rating target is a feature that, along with its central location, has seen the development attract much interest from investors.
The upgrade of the building services will be extensive, including all amenities areas, the building management systems, airconditioning, lifts and lighting. The main changes will be the construction of a polished stainless steel and glass colonnade and atrium, over cladding of the precast panels, installation of high-performance glazing and extensive modification of landscaping to improve accessibility.
On completion the building will provide 29,000 square metres of net lettable area, of which Australia Post has committed to a 15-year head lease for one-third of the space.
The deal, brokered by Colliers’ Jon Chomley and Paul Fernandes, represents a yield around 7.4 per cent, reflecting higher rents accessible through the redevelopment, which began in June and is scheduled for completion in mid-2014.
Australia Post chief operating officer Ewen Stafford said investing in the upgrade of the headquarters was a strategic move to attractive investment from buyers and future tenants, and to “create a modern, efficient and sustainable building”.
Chief executive of AXA Real Estate Pierre Vaquier said the building was an important acquisition for the company as it aligned with its goal of being a global real estate investment management platform.
“Whilst we are already active in the Asia Pacific region through our investments in Japan, the move into Australia is significant as it provides us with exposure to a new territory and allows our clients to benefit from our global investment and asset management expertise combined with that of a local asset manager in Eureka,” he said.
Savills is project manager on the redevelopment, while consultants include Norman Disney and Young.