TIAA-CREF has acquired a 50 per cent interest in Mirvac Group’s 699 Bourke Street Melbourne office building development, through a strategic office alliance.
The 50 per cent stake cost $73 million based on a capitalisation rate of 6.5 per cent and is subject to government approval.
Mirvac commenced construction on the site in August 2013 and will manage the property on its completion in 2015.
The office tower will have a total lettable area of approximately 19,000 square metres and will sit above Southern Cross Station.
In February, Mirvac gave TIAA-CREF first right to acquire 50 per cent co-investment opportunities in its prime-grade Australian office assets for three years.
Mirvac chief executive officer Susan Lloyd-Hurwitz said TIAA-CREF will benefit from Mirvac’s integrated platform and ability to source, develop and manage quality office assets in prime CBD locations.
“We have also significantly de-risked the asset, with 100 per cent of the building pre-leased to AGL for a 10 year term," Ms Lloyd-Hurwitz said.