Writer: Kylar Loussikian / Ben Wilmot
Published Date: September 6, 2016
Source: The Australian
Australia Post has pulled back from a $300 million move to sell seven GPO buildings.
The corporation, led by chief executive Ahmed Fahour, had offered the GPOs in a trust structure run by Eureka Funds Management. But the “market evaluation” that attracted interest from overseas bidders, including Asia’s billionaire Ng family, which controls the companies that own the Westin Sydney hotel, has been called off.
The family’s Singapore-based Far East Organisation declined to comment. The landmark GPOs carry strict heritage restrictions on their use.
The pressure to sell has eased after Australia Post last month moved back into the black with a $36 million annual profit driven by increased volumes in the parcel business.
The GPOs are among the finest examples of colonial architecture in the country and many have been restored and reworked to include hotels or shops.
The highest-profile properties were Sydney’s GPO building in Martin Place and Melbourne’s GPO in Bourke Street.
GPOs in Brisbane, Hobart, Perth, Adelaide and Canberra were also offered, with the freehold of six complexes earmarked for the trust along with the Canberra leasehold.
In Sydney, Far East Organisation and sister company Sino Group have an 80-year tenancy where the Westin hotel sits. In Melbourne, super fund manager ISPT has an 85-year lease at the old GPO, which accommodates H & M’s flagship store.
Australia Post had planned to keep a 40 per cent interest in the unlisted Australian GPO Trust, with Eureka to run the fund.
Bidders were offered a 60 per slice with a right to Australia Post’s holding if it was ever sold.
An Australia Post spokeswoman declined to comment on the move to keep the properties.
“We are in the early stages of reviewing our GPO properties to evaluate if there are opportunities to maximise return on these assets so that we can reinvest in our business to ensure our long-term sustainability,” she said.
Australia Post holds a spread of commercial, retail and industrial properties worth $1.6 billion. It owns about 450 properties and leases about 900.
Property executives said government-owned businesses often failed to look at the real costs of owning assets.
They also suggested that if Australia Post were ever to be privatised a sale of the GPO buildings might be on the cards.
“If they privatised it would be the first thing they look at,” one executive said yesterday.