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Commonwealth Property sells 50% of 101 Collins St

7 March 2001

Commonwealth Property Fund (CPF) is to dispose of 50 per cent of its interest in one of its major office assets, 101 Collins Street, Melbourne.

CPF is one of Australia's largest wholesale property funds with $2.3 billion of funds under management.

The divestment of a share in 101 Collins Street is in line with CPF's strategy to focus on performance through active management including divestment.

CPF has a fixed life of 10 years with all assets to be disposed of within this period.

The fund is offering a 50 per cent interest in 101 Collins Street and will continue to hold the other 50 per cent share of the asset.

101 Collins Street, a commercial office building with over 83,000 square metres of space, was developed by Commonwealth Funds Management in partnership with Kern Corporation. The building was completed in 1991, with CPF acquiring 100 per cent of the asset in 1994.

Major tenants include Freehill Hollingdale & Page, Blake Dawson Waldron, Macquarie Bank, William M Mercer and JB Were.

CPF's active management program has resulted in extensions of major leases to Freehill Hollingdale & Page and Blake Dawson Waldron and negotiations for expansion floors for a number of other major tenants.

Mr Rod Cowdroy, CPF's fund manager, believes the key to generating a superior fund performance lies in the implementation of an asset management program that places the property in its most saleable position.

"We have spent the last three years preparing the property for sale and our focus has been on the longevity and enhancement of a solid cash flow," Mr Cowdroy said.

"Tailored leasing initiatives with major tenants, maintenance planning and further development of the land adjacent to 101 Collins Street have positioned the asset as Melbourne's leading commercial investment opportunity.

"We may never see an office building of such quality constructed again in Melbourne and moreover, we may never see a building of such quality in terms of its cash flow and market position offered to the market," he added.

The sale program for 101 Collins Street will be managed by Commonwealth Property's capital transactions group, with agents Colliers Jardine and banker Merrill Lynch forming a consortium to present the opportunity to the market.

CPF owns five joint venture properties including three shopping centres with Westfield Trust, Grosvenor Place with BT Office Trust and Westpac Plaza with Mirvac.

CPF, a fixed life unlisted property fund comprising $2.3 billion in retail and office assets and unitholders including major superannuation funds, is the largest wholesale property fund managed by Commonwealth Property, the property funds management arm of Commonwealth Bank of Australia.