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Blackstone likely to clinch $600 million MAC portfolio deal including two buildings in Adelaide

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Written by Stefan Kostarelis

Private equity and property company Blackstone is expected to close an estimated $600 million property deal with South Australia’s Motor Accident Commission (MAC).

A source involved with marketing the portfolio told IPE Real Estate that the first round of bids closed last July with negotiations ongoing.

“The government seems to be taking a very long time to come to a decision, and when we asked it said it was in an evaluation stage,” the source said.

“Then the situation changed suddenly within days last week. All the other bidders began talking about Blackstone as the buyer.”

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The portfolio consists of 11 properties located in five states and includes seven commercial and four industrial buildings.

According to The Australian, the largest assets are a half-share in 400 George Street, Brisbane that was bought for $195.8 million in 2013 and 226 Adelaide Terrace in Perth, which was bought for $103.5 million. Another large asset is 990 La Trobe Street in Melbourne’s Docklands, which was purchased for $76.5 million in 2011.

The portfolio also includes two SA properties, 99 Gawler Place and 121 King William Street, which are both in Adelaide.

Fortune 500 real estate company JLL, which manages the portfolio, lists 99 Gawler Place as 15-level B-grade office tower constructed circa 1984. The approximately 11,000 sqm building is currently configured to provide basement storage and office space, ground floor retail and 14 upper levels of office accommodation.

JLL lists 121 King William Street is an A Grade commercial office building constructed circa 2008. The approximately 12,500 sqm building provides two levels of basement car parking, ground floor retail and 12 levels of office space with a rooftop corporate entertaining area.

Other properties included in the portfolio are 2 Cyanamid Street, 28-50 Cyanamid Street and 105-109 William Angliss Drive, all in Victoria, 3 Talavera Road in NSW and Buildings 8 and 17, Logan Road and Build 8, both in Queensland.

According to JLL, an annual net income of the portfolio is just over $50 million, with the majority (33.9%) coming from the properties in Queensland. The SA, WA and Victoria properties all net around 20% and the single property in NSW earns just 3.4%.

The two buildings in Adelaide earn a combined annual income of just over $10 million.

When asked by The Australian for comment, SA Treasurer Tom Koutsantonis declined, but he did say that the MAC sale was part of a decision to move the provision of compulsory third party insurance to the private sector.

Since putting the portfolio up for sale last July, AMP Capital, Abacus Property Group and Anton Capital have all expressed interest.

The Australian reports that Blackstone has assembled an Australian industrial portfolio worth more than $1.5 billion and is now increasing its commercial holdings, despite putting its $4 billion retail property portfolio up for sale.

Blackstone is one of the world’s leading investment firms, with over 2,200 employees and more than 20 offices worldwide. It currently has around $USD 368 billions worth of assets under its management.

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