Listed gaming giant Tatts Group has acquired a 3,254 square metre site in Newstead, on Brisbane’s northern fringe, to purpose-build its new national headquarters.
Watpac today announced it has entered into an unconditional contract to sell the site to Tatts for $8 million.
Tatts Group joins a growing number of national companies establishing permanent operations within the Newstead Riverpark precinct, including Energex, Macquarie Bank, Virgin, Bechtel and Bank of Queensland.
The lottery and gaming company announced last year that it was planning to relocate its headquarters from Melbourne to Brisbane, making it the third largest listed company in Queensland.
Watpac Chief Executive Officer, Martin Monro, said Watpac’s decision to sell the site forms part of the Group’s ongoing strategy to divest property assets to recycle capital back into existing businesses.
“This transaction is an excellent outcome for both parties,” Mr Monro said.
“For Watpac, the sale provides an opportunity to repatriate capital back into existing businesses, which aligns with our stated near term objectives.
“For Tatts Group it is an opportunity to purpose-build a new national headquarters in a prime city-fringe location, with excellent exposure to Breakfast Creek Road and in close proximity to major transport networks.
“The transaction is a strong endorsement of the now well-established office precinct connecting Newstead and Fortitude Valley and we believe this confidence will continue to attract tenants to the area.”
The transaction was negotiated by Seb Turnbull, National Director of Sales and Investments at Jones Lang LaSalle. Settlement is scheduled to occur in September 2013.
Mr Monro said Watpac successfully eliminated the Group’s property debt in June 2013 following the sale of more than $120 million in property assets along Australia’s east coast in FY13.
“The transaction is at current book value and while a modest impairment was recorded in FY13, it represents market value,” he said.
“We will continue our strategy to divest property assets in FY14 to return capital to existing businesses and further strengthen our financial position.”
Watpac’s rebalanced property portfolio is now valued at less than $90 million and includes Waterloo Stages II, III and IV in Newstead, which is also located in the Newstead precinct and adjacent to the Group’s head office.
Other properties include the Centra Park Industrial Estate in Coolum on the Sunshine Coast, and retail tenancies at the mixed-use Rue de Chapel development in Melbourne.
Mr Monro said Watpac’s current strategies are aimed at restoring long-term value for shareholders.
“The Group’s national contracting operations in construction and mining, and our civil operations in Western Australia, are performing well despite growing competition and tightening margins in the sector,” he said. “We remain focused on strengthening and growing these core businesses consistent with the market conditions.”