Cedar Woods Properties Limited signed an agreement to sell the Target Australia headquarters building at Williams Landing for $58.23 million.
The purchaser was Centuria Property Funds Limited and successful in securing the asset following a sale campaign.
The Centuria Metropolitan Property Trust is a subsidiary trust of the ASX-listed Centuria Metropolitan REIT, a major investor in Australian metropolitan property assets.
Under the terms of the sale, Cedar Woods will develop the Target headquarters building, with handover and settlement of the completed project expected in Q1 FY2019.
Target signed an agreement with Cedar Woods in December 2016 to build its new headquarters, committing to a 10-year lease for a 12,919 square metre office building, in a prominent position adjacent to Williams Landing train station.
“The sale reflects a yield of 6.49 percent, a strong result for the Company and consistent with our strategy of adding as much value as we can to our developments, before recycling capital into new opportunities,” Cedar Woods Chief Operating Officer Nathan Blackburne said.
“With the train station, freeway interchange and retail amenity, Williams Landing is on the radar for commercial investors who are looking for new opportunities outside of the tightly held Melbourne CBD.
“Sophisticated property investors are looking for commercial opportunities where they can secure assets with long-term tenants and strong, fixed rental growth,” Mr Blackburne said.
The Target headquarters site is located at the gateway to the booming western corridor of Melbourne. Williams Landing is designated as a Priority Development Zone by the Victorian Government.
The sale follows a recent on-site event marking construction commencement of the Target headquarters, which was attended by Victorian Treasurer Tim Pallas and other local dignitaries.
The office is one of many commercial sites providing a development pipeline of more than 10 years at Williams Landing. Analysis prepared by property and planning economists, MacroPlan Dimasi, showed that Williams Landing has the potential to accommodate more than 13,000 jobs and become a major commercial centre servicing the western corridor of Melbourne.
The Target Australia Headquarters is currently under construction at its master planned community in Victoria.