Mirvac to Help US Pension Fund Buy Premium Offices

Thursday, February 20th, 2014
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Mirvac has struck a deal with one of America’s leading retirement providers to jointly invest in prime office projects sourced by the Australian property group.

Under the Australian Office Alliance (AOA) established between Mirvac and Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF), the US financial services provider will be given priority purchasing rights to a 50 per cent stake in any prime-grade Australian office tower projects that Mirvac acquires in future.

The terms of the agreement dictate that TIAA-CREF will be made responsible for the provision of funding, while Mirvac will bear development-related risks, as well as be entrusted with the provision of investment management services,  property management services and development services in relation to any assets acquired under the AOA.

The agreement does not include Mirvac’s City Tattersalls project on Sydney’s Pitt Street.

TIAA-CREF is one of America’s leading retirement providers, catering to 3.7 million active and retired people working in academic, research, medical and cultural fields. The fund is a Fortune 100 financial services organisation, and as of December 12 2013 had $564 billion in assets under management.

Susan Lloyd-Hurwitz, Mirvac’s chief executive, said that the relationship established with TIAA-CREF for the acquisition of core office assets would serve to advance the Australian real estate group’s core strategic interests.

“The alliance with TIAA-CREF is in line with Mirvac’s strategy to feel down up to 50 per cent of major assets and development projects to strategically aligned, long-term wholesale investment partners,” said Lloyd-Hurwitz.

Mirvac currently hopes to sell off a 50 per cent stake in its Westpac headquarters on 275 Kent Street, whose value is estimated at around $410 million, The group also plans to sell half a billion dollars in “non-aligned” assets to obtain funds for other acquisitions as well as office and retail projects.

Analysts said that Mirvac is well positioned to meet rising demand by bringing forward project commencements, given the group’s high level of exposure to the NSW and medium density residential sectors.


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