Mapletree Books Third Money-Losing Exit From Aussie Office Fund With $58M Brisbane Sale

Singapore’s Mapletree Investments has agreed to sell a South Brisbane office block for A$83 million ($58 million), with market sources confirming the pricing for the asset as the Temasek-owned group continues to unwind a seven-year-old Australia fund.

The disposal of 144 Montague Road marks at least the third loss-making exit from the Mapletree Australia Commercial Private Trust (MASCOT), following earlier divestments in Melbourne and Sydney at discounts to acquisition cost.

Mapletree had acquired the 13,811 square metre (148,670 square foot) office building in December 2014 for A$92.7 million, according to Knight Frank data, before transferring the asset to the MASCOT vehicle as part of the fund’s seed portfolio.

Acure Asset Management is understood to be the buyer, with the Perth-based firm currently raising capital from wholesale investors to back the acquisition via a new Brisbane-focused vehicle.

A Mapletree representative told Mingtiandi that the Australian office market had faced “significant challenges” soon after the fund’s closing with the onset of the COVID-19 pandemic.

“Despite the challenges, MASCOT has remained focused on protecting investor value by exercising disciplined asset management which includes repositioning of assets and looking for suitable divestment opportunities,” the spokesperson said. “Mapletree remains committed to achieving the best outcome for investors.”

Wind-Down Continues

The latest transaction continues the sell-down of MASCOT, a closed-end fund Mapletree established in 2019 after raising A$654 million in equity and seeding the vehicle with a portfolio of 10 Australian office assets valued at A$1.4 billion at the time.

With the fund’s initial five-year term and extension options now elapsed, Mapletree has been exiting assets assembled near the peak of Australia’s office cycle prior to the COVID crisis.

The Brisbane sale follows Mapletree’s disposal of 417 St Kilda Road in Melbourne last September at a reported price of over A$90 million, or more than one-third below its 2017 purchase level. That deal was followed by the January sale of 78 Waterloo Road in Sydney’s Macquarie Park to Growthpoint Properties for A$101 million, also below Mapletree’s entry price.

Across the three transactions, Mapletree has exited assets acquired for a combined A$343.7 million at materially lower values, reflecting a repricing of office assets as higher interest rates and shifting workplace trends weigh on demand. MASCOT’s remaining properties include 1G Homebush Bay Drive and 118 Talavera Road in Sydney, as well as 11 Waymouth Street in Adelaide, according to the fund’s website.

The 144 Montague Road property was Mapletree’s first foray into Australia’s office segment, having been acquired from a vehicle of US-based developer and fund manager Hines. Completed in 2009, the building was fully leased at acquisition and has since been repositioned with a mix of government and private-sector tenants, including engineering and tech occupiers.

The asset generates stable income, with government-linked tenants accounting for a significant share of occupancy, according to leasing materials. Despite that profile, softer office valuations in Brisbane’s fringe markets have weighed on pricing, with Acure picking up the property at A$6,010 ($4,232) per square metre of lettable area.

Betting on a Recovery

Acure is taking a counter-cyclical view, marketing 144 Montague Road as part of a new fund offering with a 9 percent initial distribution yield and a 15.2 percent target return after fees. The manager has highlighted Brisbane’s supply constraints and long-term demand drivers, including infrastructure spending tied to the 2032 Olympic Games.

Acure’s move builds on its earlier acquisition of 339 Coronation Drive, a Brisbane riverfront office block purchased last year for A$80 million from a fund managed by Keppel, another Temasek-backed group. Keppel reportedly paid A$40 million in 2018 for the then-unoccupied city-fringe building.

While Acure is assembling a portfolio of Brisbane office assets aimed at capturing a recovery in values after the sector’s post-pandemic correction, Mapletree’s latest disposal narrows the remaining pool of assets in MASCOT, as the Singaporean investor completes the wind-down of a fund launched at a markedly different point in the office market cycle.

Note: This article has been updated to indicate that Mapletree’s sale of the asset is still in progress, with the buyer still raising capital to fund the transction. Mingtiandi regrets any misunderstanding.