Mirvac has entered into an agreement with Singapore's Suntec REIT to sell a half stake in its landmark Olderfleet Collins Street office development.
The total consideration for the stake is $414 million, based on a capitalisation rate of 4.80%.
Suntec will fund 50% of the development costs via a fund through agreement throughout the construction period, while Mirvac will provide a five-year rental guarantee on any unlet office space from the date of practical completion.
Mirvac will also be responsible for providing development management and ongoing property and investment management services.
Mirvac CEO Susan Lloyd-Hurwitz said the company was thrilled to have secured another high-quality capital partner to invest with them at 477 Collins Street.
Commenting on the partnership with Mirvac, Suntec Chief Executive Officer Chan Kong Leong, said they were confident that Olderfleet, 477 Collins Street will be a landmark development that appeals to leading companies.
Located in the heart of Melbourne’s financial district and rising from the unique 1880s facades of the Olderfleet Buildings, 477 Collins Street will provide over 56,000 square metres of office space over 40 levels on completion, and will become the largest premium grade office building to be delivered in Melbourne in over 25 years.
Designed by Grimshaw Architects, the building offers flexible floorplates of up to 1,950 square metres and incorporates a vertical village concept, with the tower split into three separate pods to express key internal workings of the building and make strong connections with the heritage context.
The asset is also significantly de-risked, with professional services firm, Deloitte, committing to over 22,000 square metres of office space for a 12-year term. A 5 Star Green Star rating and a Platinum WELL certification are being targeted, and practical completion is anticipated for FY20.