Stockland has offloaded its 50 per cent stake in the BankWest Tower to Brookfield for $130 million, in an asset swap deal that will see Stockland pick up two residential projects in Perth's north-east corridor for $271 million.
Stockland has offloaded its 50 per cent stake in the BankWest Tower to Brookfield for $130 million, in an asset swap deal that will see Stockland pick up two residential projects in Perth's north-east corridor for $271 million.
The property giants announced today that Brookfield Capital Management would take Stockland's stake in Bankwest Tower, which is currently undergoing a major refurbishment.
Stockland said the sale price is in line with the December 31 2010 book value and reflects a capitalisation rate of 7.75 per cent, while the initial yield of 8.87 per cent reflected the cost ofcompleting refurbishments and re-letting the building once BankWest vacates to Raine Square later this year.
Brookfield Capital Management holds the remaining 50 per cent stake in the tower.
The other side of the asset swap is Stockland's purchase of The Vale and Whiteman Edge from Brookfield Prime Property Fund for $271 million, which collectively comprise a potential 3,900 lots over 340 hectares.
The acquisition is Stockland's biggest residential acquisition in Perth and it said it would significantly increase the size and scale of its WA business.
The Vale was launched in 2005 and has an end value of around $780 million. There are 2,700 lots remaining to be developed.
Whiteman Edge is a new 1,200-lot community with an end value of around $310 million. Stockland said the product launch for Whiteman Edge was imminent, and it would contribute to its earnings next financial year.
Also today, in separate transactions, Brookfield announced it would acquire Southern Cross West, a 20-storey, 46,000sqm office tower in Melbourne for $120 million; while Stockland said it would purchase the Point Cook Town Centre in south west Melbourne for $176 million in another asset swap, this time with the Walker Corporation.
Stockland also said it would acquire a 17ha parcel of land in south West Sydney for $10 million, while Walker Corporation would buy a Brisbane office development for $54 million on completion of refurbishment and Canberra's Myuna complex for $24 million.
The total cost of the acquisitions for Stockland is $457 million, but the developer said its net cash outlay would be around $280 million.
Stockland managing director Matthew Quinn said the transactions were strategically significant.
"We have repeatedly signalled our intention to reweight our portfolio towards our 3-R strategy, focusing on residential, retail and retirement living," Mr Quinn said in a statement.
"Both transactions involve asset swaps, and the reinvestment of capital from non-core management intensive assets into projects that fit Stockland's long-term strategic growth objectives.
"These transactions are in line with our strategy to self-fund our growth and represent efficient use of capital as we recycle funds from the sale of non-core, office assets into good quality, strategic residential and retail assets."
Brookfield said it would fund its acquisitions through a combination of available funds, bank debt and an extension to its existing $372 million debt facility, to a three-year, $525 million fund.
