MAB Funds Management (MAB FM) has negotiated a new 10-year lease with leading Australian dental centre operators, Pacific Smiles Group, at The Pavilion, overlooking Bourke Street Mall.
The landmark four-level property occupies the prominent corner of Bourke and Elizabeth Streets in Melbourne’s retail core. It is owned by the well performing MAB Bourke Street Trust (MBST, ARSN 099 460 616), an unlisted Australian unit trust.
The Pavilion was re-valued at $22.25 million in June which is $5.05 million above its 2004 valuation. MBST now has a net tangible asset value of $1.64 per unit, an increase of over 60 percent from the original $1.00 per unit investment in 2002.
In the pre-emptive deal, MAB FM with the assistance of Allard & Shelton, negotiated the surrender of a lease with Blockbuster to secure Pacific Smiles Group for the longer term. Blockbuster’s lease was due to expire in June 2008.
The MBST building has strong signage visibility and is ideally situated for the Sydney-based Pacific Smiles Group Melbourne launch.
John Gibbs, General Manager for the Pacific Smiles Group, confirmed that the group was delighted to have secured such strategically located premises and was looking forward to commencing operations in late February 2007. The centre will be designed with the city worker in mind, comprising five surgeries – each fitted with state of the art technology and a modern and stylish interior.
General Manager for MAB FM, Mr Nick Gray, is pleased with the arrangement which he says demonstrates the team’s proactive approach to asset management.
“We are very strategic when it comes to lease negotiations. We had an opportunity to secure a long term lease for the building and avert down time which can occur between tenant leases.
“MAB FM identified the strength of the Pavilion’s amenities and location when the property was purchased, and tenants also clearly recognise these attributes.”
The new lease follows a period of strong leasing activity for the Pavilion, including a recent six-year renewal to Angus & Robertson, whose tenancy represents 26.6 percent of the property’s income.
• Modern four-level retail property constructed in 1995.
• Situated in north-west corner of the intersection of Bourke and Elizabeth Streets opposite the former Melbourne GPO and the western end of the Bourke Street Mall.
• Gross building area of 3,025 square metres.
• Fully let to tenants including St George Bank, Angus & Robertson, Kathmandu and Intrepid Travel.
• Average unexpired lease term of 4.58 years (by income).