A skyscraper that was once the tallest office tower in the Southern Hemisphere has gotten some new investors. A joint venture of Dexus and Singapore’s sovereign wealth fund GIC has purchased a 50 percent stake in Rialto Towers in Melbourne, Australia for $398 million (AUD 644 million) from Grollo Group, which continues to own the remaining 50 percent stake. The off-market transaction is expected to close in May 2020.
Located in Melbourne’s central business district at 525 Collins St., the 55-story Rialto Towers is 91.7 percent occupied. The tenants, which include Bank of Melbourne, coworking provider Spaces and Mercedes-Benz’ cafe Mercedes me, have an average weighted lease term of 4.6 years as of March 1, according to Dexus.
GIC will hold a 90 percent share in the joint venture, while Dexus will control the remaining 10 percent. Dexus will also be the investment manager of the joint venture as well as the manager of Rialto Towers.
GIC has worked with Dexus in recent months by investing in its Australian Logistics Trust on April 1. A few months earlier, GIC purchased LG Twin Towers, a two-building office complex in Beijing, for $1.1 billion from the South Korea-based LG Group. Elsewhere in Australia, GIC partnered with Australian property investor Charter Hall in November 2019 to purchase Jessie Street Centre, a 580,000-square-foot office building in Sydney.
Tall towers in Melbourne
Rialto Towers was originally conceived by a joint venture of the Melbourne-based investment company Grollo Group and the London-based St Martin’s Properties in 1981. The joint venture completed construction of Rialto Towers in 1986, while also spending $100 million on revitalizing a low-rise building that offered rooftop dining and bar options.
When it was constructed, the 824-foot Rialto Towers earned the title of the tallest office building in the Southern Hemisphere. The skyscraper has since been knocked down several places on the tallest towers in Melbourne list, including after both the nearby skyscrapers at 101 and 120 Collins St. were constructed in 1991.