Overseas investors buy ANZ Sydney headquarters for refurbishment

The Boston-based international real estate advisor Pembroke Real Estate, on behalf of an affiliate, has bought 20 Martin Place, Sydney from the ANZ Bank reputedly for about $95 million. Some 19 offers were received for the office block, which has been owned by ANZ since its 1973 completion.

Located in Sydney’s CBD core, the property features 21 floors of offices and prime retail.

Pembroke, which joins the growing long list of foreign buyers of prime CBD office blocks undeterred by the strong Australian dollar, invests the private capital of FMR LLC (Fidelity Investments) and FIL Ltd (Fidelity International) in long-term opportunities in markets typically focused on Europe, Japan and the United States.

Offering a substantial refurbishment opportunity, 20 Martin Place is the first acquisition in Australia for Pembroke and its affiliates. The purchase highlights the trend towards buying assets that offer development potential – that is core-plus categories, where tenants are leaving and the site is earmarked for upgrade.

It will be refurbished by Pembroke following ANZ’s relocation in 2013 ANZ Tower at 242 Pitt Street, developed by Grocon. It is to be leased to ANZ until June 30, 2013 with options, providing initial net rental income of $8.5 million per annum.

ANZ has agreed to take a long-term lease over new banking chambers in the proposed Martin Place project.

It was sold through CBRE agents Rob Sewell and Josh Cullen in conjunction with Jones Lang LaSalle, represented by John Talbot and Rob Harris.

Both ANZ and Pembroke have agreed not to officially disclose the purchase price.

Offers were due June 8, with Pembrooke pinpointed as its likely buyer on July 6 in the Australian Financial Review.

“Domestic superannuation funds and trusts were all in a very competitive bidding process alongside local and offshore core plus funds,” Sewell notes.

Talbot suggests the sale reinforced the near domination of offshore buyers in the current cycle, with virtually all the recent transactions recorded in the Sydney CBD sold to offshore investors, both institutional and private.

It has 15,542 square metres of office and retail accommodation.

“We look forward to opening a new retail bank branch at this key location post refurbishment,” Kate Langan, ANZ Group general manager of property, says.

It was valued at $70 million in 2002.

In 2009 ANZ Bank confirmed it would relocate its NSW head office to a new premium-grade 43-floor office building, having outgrown its NSW head office at 20 Martin Place.

ANZ negotiated exclusive naming and signage rights on the building and 22,000 square metres of the total office floor space, or about half of Grocon’s $800 million tower at 242 Pitt Street, where GPT Group and LaSalle are also stakeholders.

The 20 Martin Place office will the escape the wrecker’s ball, but will be stripped back to its steel core and then rebuilt to a five-star green rating.