Writer: Ben Wilmot
Published Date: May 4, 2014
Source: The Australian
Singapore’s giant Far East Organization has swooped on the freehold of the historic Sydney GPO with a deal in train that will see the company own the bulk of the complex in a $150 million purchase.
The group, which already owns a portion of the Sydney landmark, is buying the historic post office space and areas in the complex occupied by luxury restaurants and up-market cafes.
The deal will see Australia Post sell off its remaining slice of the complex, with other parts of the site sold 20 years ago as it was redeveloped to include office and hotel space.
Far East Organization is effectively buying some areas that it currently leases but a key element of the deal will see the post office operating on the site on a long-term lease until 2096. The building is still subject to heritage protection.
Far East Organization, controlled by the billionaire Ng brothers, has built up a $2 billion property empire in Australia and mainly owns office blocks, including late media magnate Kerry Packer’s former headquarters in Elizabeth Street.
The group already owns the freehold of the Westin Sydney, which is part of the broader GPO complex. It also owns that hotel in partnership with an associated company.
Another part of the complex is owned by fund manager Charter Hall Group.
The deal is subject to Foreign Investment Review Board approval and federal heritage rules but Far East Organization has a long history owning classic buildings across Asia.
Australia Post yesterday confirmed it planned to sell the Sydney GPO freehold, pending approval from the FIRB and Commonwealth Heritage.
A spokeswoman said the transaction would free up capital to invest in staff and services. Although it tested the market with a $300m portfolio across major capitals last year, Australia Post said there were no current plans for the sale of any other GPOs.
The corporation last year explored selling seven GPO buildings, offering them in a trust structure run by Eureka Funds Management. But that process was called off partly due to its complexity.
Australia Post would have kept a 40 per cent interest in the unlisted Australian GPO Trust, with Eureka to run the fund, but the latest deal is far easier to execute.
Far East declined to comment but its ambitions for the GPO are believed to be fairly modest with the company wanting to secure its position in the Martin Place complex and manage the retail areas more efficiently.