US investment manager AEW Capital has added to its Australian holdings with the $200 million purchase of a major office tower on Melbourne's Queen Street.
The Boston-headquartered AEW acquired the 27-storey tower at 31 Queen Street off-market on a sub-5 per cent yield.
The vendor, financial services giant Challenger, is reducing its real estate asset allocation as part of a strategic decision to shift into fixed-income investment.
The financial services company has now sold $700 million of commercial assets.
AEW last acquired a Pyrmont office building at 19 Harris Street for $143 million in November.
Challenger acquired the 27-storey tower, which offers 19,213sq m of net lettable area, in 2011 for $81 million.
Commercial agency JLL brokered the deal. All parties declined to comment on the acquisition.