Capital city GPOs set for mass sell off
Australia Post is selling off around $300 million worth of its heritage buildings to gain some financial stability.
The colonial-era GPOs are being used by chief executive Ahmed Fahour in a bid to save the postal business from financial ruin.
The company posted a $222 million loss last year.
The rescue plan to attract property investment into a fund run by Eureka Funds Management is revealed in confidential investment documents obtained by The Australian Financial Review.
Long at the heart of each capital across Australia, many of the GPO's are over 150 years old and stand as some of the country's landmark buildings, particularly Melbourne's GPO in the Bourke Street Mall and Sydney's GPO at 1 Martin Place.
Each GPO in the seven capitals are on offer, representing a 207 year old postal service which is struggling in the modern day.
Since the posted loss last year, Fahour has cut 900 workers, increased the price of ordinary stamps and introduced a two-speed mail service in an effort to stem the record losses in its mail business.
The proposed deal suggests that Australia Post would initially retain a 40 percent stake in the unlisted Australian GPO Trust, to be run by Eureka.
An incoming investor would take the remain 60 percent.
"The portfolio represents a compelling blue chip investment proposition, being well diversified by location, use and tenants," the EOI documents said, setting a May 20 deadline for bids.
The Far East Organisation and Sino Group have an 80 year tenancy at Sydney's GPO in Martin Place where there is now a Westin Hotel.
Super fund investor ISPT also has a 85 year lease at the old GPO in Melbourne which now homes Swedish fashion store H&M.
The portfolio is forecast to deliver $16.5 million in net income in 2017 with an average lease expiry of 32 years.
Australia Post spokesman Mark Gardy said that the proposed sell off plans are in the early stages.
"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," he said.
"If we decided to proceed, we would ensure the heritage significance of these properties is maintained."
