Quintessential Equity looking at potential Telstra House deal

Quintessential Equity is running the rule over Telstra House as the telco prepares to relocate from its long-standing city HQ.

Boutique property fund manager Quintessential Equity is running the rule over Telstra House in the CBD ahead of the telco’s move to Charter Hall’s $450m development at 60 King William St.

The Pirie St tower’s current owner, ASX-listed Australian Unity Office Fund (AOF), has been looking to sell off assets this year after investors knocked back a proposed merger with the unlisted Australian Unity Diversified Property Fund.

In July private investment platform Aliro Group ditched a $403m takeover proposal for AOF due to worsening conditions in the office market.

Colliers and Knight Frank were later appointed to sell, individually, three of the fund’s properties in Canberra and Queensland.

Telstra will relocate from Pirie St next year.

Telstra will relocate from its long-standing Adelaide home next year after signing up for 6000sq m in the Charter Hall development.

The company has occupied the 25,000sq m Pirie St tower since it was built in 1987, and its departure will leave more than 90 per cent of the building’s office space vacant.

The property is valued at $73m in AOF’s books, a hefty cut on the $90m valuation in June 2021.

AOF has previously proposed a multimillion-dollar revamp of the site including changes to the design of the forecourt, ground floor entrance and lobby, the introduction of a concierge service, new retail tenancies and potentially a facade upgrade.

New co-working spaces, improved end-of trip facilities, lift upgrades and refurbishments across multiple floors were also planned.

Quintessential executive chairman Shane Quinn declined to comment on the due diligence negotiations and his plans for the building were a deal to be struck.

“Quintessential Equity is always looking for great opportunities, however currently discussions are commercial in confidence,” he said.

Quintessential has been an active investor in Adelaide’s commercial and industrial property sector and is bullish about the city’s prospects as it emerges from Covid-19.

It recently started work on a $25m-plus upgrade of the Commonwealth Bank building on King William St following its $71.5m acquisition last year and the bank’s relocation to Kyren Group’s Wakefield St office building.

Meanwhile after securing packaging giant Visy for a 44,000sq m lease at its Port Adelaide Distribution Centre last year, Quintessential is expected to bank a sizeable profit on the sale of the industrial site which is currently listed with Colliers and CBRE.

Quintessential paid Stockland $80m to acquire the property in 2019, and has since expanded and upgraded warehouse facilities across the 32ha site.

Geelong - another city that, like Adelaide, has fared relatively well during Covid-19 is also on Quintessential’s radar.

Last month the company unveiled plans for a $130m office development in Victoria’s second-largest city, which has experienced a surge in demand for corporate space since before the pandemic.