Deal of the Month

As a result, CIC now owns stakes in nine premium commercial office towers including Deutsche Bank Place (126 Phillip Street), Telstra Building (400 George Street) and Grosvenor Place (225 George Street) in Sydney, as well as 120 Collins Street in Melbourne. Property in Brisbane was also acquired.
The deal marks the largest direct property sale in Australia’s history, and though rents are currently flat in Australia (as well as all buildings having long-standing tenants), they are expected to rise in the future with office vacancy rates declining, both due to a strong economy and many commercial towers being converted for residential use.

Earlier in the year, CIC also made major real estate purchases in Japan and Europe, and now boasts a worldwide portfolio worth over US$746 billion. Of this, around US$220 billion is overseas. In order to make its latest addition, CIC had to outbid over 50 rivals and has now, in one swoop, become one of Australia’s largest commercial landlords.

The price of A$2.45 billion is 20 percent above a December valuation and is expected to lead to increase in property value throughout the region. Also, due to the decline of the Australian dollar, as the deal was done using US dollars, the properties would have cost US$2.75 billion (almost US$1 billion more) had the transaction been made in 2011.

CIC was represented by a Clayton Utz team led by partners David Wilkie and Kylie de Oliveira, while Allens advised Investment Property Group, led by partners Vijay Cugati and Mark Stubbings.