Commonwealth Property Office Fund (ASX:CPA) will sell a 42-story office building in Sydney to a private investor for $395 million.
The sale of 259 George Street, located in the city’s central business district, looks set to be one the biggest office sales of the year.
Commonwealth Property Office Fund says the sale price is a 15.3 per cent premium to its independent valuation at the end of June.
Proceeds from the sale will initially be put to retiring debt and are expected to reduce the Fund’s gearing by around 9 per cent.
The Fund is also considering the potential payment of a special distribution, reinvestment into its development pipeline or acquisition opportunities.
In the first half of the 2011 financial year, Commonwealth Property Office Fund generated a net profit of $121.6 million.
