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Australia Post heading in the REIT direction

May 15th 2016 | Urban Property Australia, Property Review Australia

Australia Post

AUSTRALIA Post is pinning a turnaround in its flagging fortunes on the sell-off of seven historic GPO heritage buildings across the country.

The historic sites are expected to bring $300 million and are headlined by Sydney’s 1 Martin Place and Melbourne’s Bourke Street mall buildings, and include the GPOs in Brisbane, Adelaide, Canberra, Perth and Hobart.

The freehold of six properties and the Canberra leasehold will be transferred into a listed Australian GPO Trust to be run by Eureka Funds Management, with Australia Post initially retaining a 40% stake and an incoming investor taking the remaining 60%.

Some of the GPOs are subject to long leasehold deals, with Far East Organisation and Sino Group holding 80-year leases in Martin Place, which is also home to a Westin Hotel, and super fund investor ISPT holds an 85-year lease at Bourke Street mall, also the site of H&M’s flagship Melbourne store.

Australia Post is a tenant at three of the GPOs.

The portfolio is forecast to return $16.5 million net in 2017, and has an average lease expiry of 32 years.

Property Review Australia – 10th May 2016