Finance Finance News Australia Post is getting ready to sell its crown jewels
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Australia Post is getting ready to sell its crown jewels

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Australia Post is readying to sell its most prized property assets as the organisation’s senior management looks for ways to turn around the company’s ailing financial fortunes.

Leaked investment documents show Australia Post is actively seeking expressions of interest to sell its GPO buildings in Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart and Canberra – most of which date back to the late 1800s.

No timeframe has been set as yet, but sources told The New Daily that the historic sandstone buildings are likely to go on the auction block very soon under the direction of Australia Post chief executive Ahmed Fahour.

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A May 20 deadline for bids on the portfolio is stipulated in the expression of interest documents.

And timing is of the essence, with the cash-strapped organisation having recently reported an 84 per cent fall in its half-year profit to just $16 million following a disastrous $222 million loss in 2015, its first in more than three decades.

Screen Shot 2016-05-10 at 4.42.46 pm
Melbourne’s iconic GPO building.

With an estimated value on its prime GPO sites of more than $300 million, one option under consideration is to sell the buildings into a trust company that would be run by Sydney-based real estate investment group Eureka Funds Management.

Australia Post would take a stake of 40 per cent in what would be known as the Australian GPO Trust, with one or more investors buying the remaining 60 per cent.

But the plan would ultimately see Australia Post reduce its stake, with other investors having first right of refusal to buy out its interest in the trust.

“This is truly an exceptionally rare offering of prime real estate, unlikely ever to be repeated,” the documents state.

“The portfolio represents a compelling blue chip investment proposition, being well diversified by location, use and tenants.”

In Melbourne, for example, the historic GPO on Bourke Street in the CBD – built in 1859 – is currently leased to tenants including retailer H&M.

Sydney’s GPO on Martin Place – built in 1866 – is leased to the Far East Organisation and Sino Group under an 80-year tenancy. The building currently houses a Westin Hotel.

Sydney's GPO is now a Westin Hotel.
Sydney’s GPO is now a Westin Hotel.

The average lease term on Australia Post’s GPOs is 70 years.

Australia Post lists more than 4400 properties in its financial accounts, including 728 corporate offices, 2899 post offices and franchises, and another 779 post agencies.

The properties were listed with a gross book value of $1.5 billion at June 30, 2015.

Australia Post sought to downplay the leak on Tuesday.

“We are in the early stages of reviewing our GPO properties to evaluate if there are opportunities to maximise return on these assets so that we can reinvest in our business to ensure our long-term sustainability,” an Australia Post spokesperson said.

“If we decided to proceed, we would ensure the heritage significance of these properties is maintained.

“No decision has been made and this process is only in market evaluation stage. This is part of our regular review of our property portfolio.”

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