Investa Office Fund (“IOF” or “the Fund”) today announces it has successfully renewed the lease to Coles at 800 Toorak Road, Melbourne. This lease represents the largest tenant by area in the Fund’s portfolio.
Coles fully occupy the 42,000 square metre office complex and have renewed their lease from the current lease expiry in November 2016 to January 2030, taking the weighted average lease expiry from 3 years to 17 years.
As part of the lease renewal the building services will be upgraded and amenities refurbished. A plot of land adjoining the office complex will also be acquired and a 1,200 bay multi deck car park constructed for Coles, subject to planning consent. IOF’s share of cost for the office refurbishment and car park is anticipated to be $28 million, and upon completion of the works the building will generate a yield on cost of 8.2%.
Toby Phelps, Fund Manager of IOF said: "Working collaboratively with Coles to allow them to refresh their premises and meet their long-term accommodation requirements has resulted in the Fund being able to forward solve a key financial year 2017 income risk, and underpins the future value of this asset with a long weighted average lease expiry.”
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