Abacus Property Group is set to acquire one third interest in the Myer Melbourne property on Bourke St.
Simultaneously, Charter Hall will acquire a third interest (as tenants-in-common) with the remaining third share held by the property manager, Vicinity.
Total consideration for the acquisition is $135.2 million (excluding transaction costs) and reflects approximately $10,157 per square metre of gross lettable area (GLA) and a 6% passing yield.
"It is pleasing to be able to take advantage of this intergenerational opportunity with longer term repositioning potential," Abacus MD Steven Sewell said of the deal.
"This transaction aligns with our strategic priority of acquiring commercial assets in select locations where we see amenity and infrastructure improvements that we believe will ultimately translate to strong tenant demand.
"With the potential for a degree of repositioning, this is a great opportunity for the group, together with its partners, to implement active asset management plans and drive superior returns from the asset," he said.
According to Abacus, the building is recognised as one of Melbourne CBD’s best-known buildings and is located in a prominent position on the Bourke Street Mall.
It has a 61 metre frontage and has nine levels of retail accommodation over approximately 40,000sqm of GLA.
The building has a weighted average lease expiry of 10.5 years and is 100% leased to Myer.
The deal is expected to settle at the end of July 2021.
The acquisition will be funded by debt.