x Abu Dhabi, UAEFriday 19 January 2018

Adia in Dh816m Australian property foray

The world's largest sovereign wealth fund is expanding its portfolio down under.

Abu Dhabi // Abu Dhabi Investment Authority (Adia), the world's largest sovereign wealth fund, is expanding its property portfolio in the Australian market. Its latest investment was a A$280 million (Dh819m) stake this week in a dual office tower project in Sydney, according to people familiar with the deal. The A$560m project, called Darling Walk, is part of a string of investments and acquisitions in Australia by Adia in the past year. The fund already co-owns several office towers in Sydney and Brisbane, in stakes worth several hundreds of millions of dirhams. Earlier this year, Adia acquired a small stake in the construction company Leighton Holdings and a 19.9 per cent stake of AMP New Zealand Office Trust for A$156m.

The new project, Darling Walk, will include two nine-storey buildings with a combined total of about 58,000 square metres of office space on the edge of the city's central business district, as well as a retail area, theatre, community green space and underground car parking. The Sydney Harbour Foreshore Authority awarded the developer, Lend Lease Corporation, a 99-year lease for the 1.5-hectare footprint of the project.

Lend Lease said the project would be financed by a property trust, Australian Prime Property Fund Commercial, and an "offshore institutional investment partner". People familiar with the deal identified the partner as Adia. Officials at Adia declined to comment. Lend Lease has already signed up the Commonwealth Bank to fill all but 5,000 sqm of the building in what observers said was among the largest office lease deals in Australian history.

The Commonwealth Bank is planning to move its staff from 12 separate buildings to the new towers. Demolition of the existing buildings at the site began yesterday and construction is expected to be completed by 2011. Adia is said to be increasing its direct investment in the property market. Sovereign wealth funds in general have been eyeing opportunities created by the subprime mortgage crisis and credit crunch across the world. Adia's sister fund, Abu Dhabi Investment Council, bought 90 per cent of the Chrysler Building in New York City for an estimated US$800m (Dh2.9 billion) in July.

The UAE has a history of strong business relationships with Australia. The likes of Dubai World and Emaar are involved with projects in the country. And the recently created strata law in Dubai is modelled after Australia's strata law. Peter Crogan, the chief executive of BCS Strata Management Services, based in Australia, is expecting to manage tens of thousands of properties in Dubai. @Email:bhope@thenational.ae