Mirvac makes Sydney CBD move

Mirvac has sealed a deal to ­introduce Morgan Stanley’s real estate arm to a half stake in a $600m Sydney CBD tower.

Property investment and development group Mirvac has locked in its status as a major player in Sydney’s central business district office market, sealing a deal to ­introduce Morgan Stanley’s real estate arm to a half stake in a $600 million tower carved out of the former Investa Office Fund portfolio.

The move will see it take full control of 10-20 Bond Street and expand its ties with major capital partner Morgan Stanley Real ­Estate Investing, which also invests with Mirvac in Melbourne office towers and logistics.

The move was sparked by Canada’s Oxford Properties Group completing its $3.4 billion takeover of IOF, which triggered pre-emptive rights that allowed Mirvac to nominate a new partner to buy the half of the tower it does not own.

Mirvac has been highly active in striking partnerships, and last year facilitated a deal that resulted in US-headquartered Blackstone enter as its partner at nearby 60 Margaret Street.

The US private equity house bought a half share in that $800m office block from Hong Kong-based PAG and will again be working with co-owner Mirvac, with which it has struck other transactions.

10-20 Bond Street in Sydney.

Blackstone is likely to help Mirvac position the complex for a revamp to match the overhaul of the nearby $2bn Wynyard Place being undertaken by Canadian giant Brookfield, which has AMP Capital as its partner.

Mirvac’s business model is ­focused on introducing capital partners to major towers including those it is developing at places including Sydney’s ATP precinct and in Brisbane, where it is developing the new Suncorp headquarters with the backing of Britain’s M&G Real Estate.

The deal has long been in the works with Mirvac last year lining up the Morgan Stanley unit to ­invest in a half stake in a $310m Bond Street complex.

The interest was then slated to come into play if Blackstone’s $3.1bn takeover offer for IOF went ahead, but it was outbid by Oxford.

Mirvac held its stake in the building on a 5.2 per cent cap rate giving it a value of $309.5m and the latest deal is around this level.

The Susan Lloyd-Hurwitz-led group was keen to take full control of the building and introduce Morgan Stanley, which has grown ties with the group over the past two years.

The US group then bought a half stake in Mirvac’s 699 Bourke Street office building in Melbourne’s Docklands from funds manager TH Real Estate for $102m. In that deal, Morgan Stanley’s Prime Asia fund became co-owner of the 10-level tower at 699 Bourke Street with Mirvac, which has kept its half stake since finishing it in 2015.

The bank’s Prime Asia fund also bought a half stake in ­Mirvac’s adjacent tower at 664 Collins Street for $138m in 2017.

Mirvac also formed a tie-up with Morgan Stanley in industrial property in 2017, striking a deal for the pair to jointly own two ­Victorian complexes worth $65m.

The 38,282sq m Bond Street property comprises two buildings and a ground floor retail plaza: 10 Bond Street has seven levels of ­office space; and 20 Bond Street offers 31 levels of office space, with the upper floors with harbour views.