This article is from the Australian Property Journal archive
CENTURIA Capital has acquired the Bendigo Bank headquarters at 80 Grenfell Street in the Adelaide CBD for $184.6 million, via an unlisted property fund in partnership with the Lederer Group, from US giant Blackstone.
The 11-storey A-grade office building is 96% leased to Bendigo & Adelaide Bank and has a 7.3-year weighted average lease expiry.
Centuria’s fund and the Lederer Group will both pay $92.3 million for the asset, which is next to Adelaide’s major retail precinct Rundle Mall. Blackstone acquired the building as part of its $400 million acquisition of Rundle Place in late 2015.
The Rundle Place package was part of Blackstone’s 10-asset retail portfolio that it offered to the market last year with hopes of fetching as much as $4 billion, before pulling the plug in September.
The 80 Grenfell St sale comes as Blackstone put the Top Ryde centre in Sydney back on the market with an asking price of $700 million.
Centuria head of real estate and funds management, Jason Huljich said the Adelaide market had become increasingly attractive to property investors for a number of reasons, including the South Australian government’s decision to reduce stamp duty.
“Compared with other states, where stamp duty averages 5.5%, South Australia’s is currently 1.8%, moving to zero on July 1, 2018,” he said.
“When transaction costs are lower, yields are higher, which means better returns for our investors. And at the same time, the South Australian economy is on the up and up. Significant investment in defence infrastructure and health are driving growth in employment and economic activity generally – all good news for property markets,”
The deal takes Centuria’s organic acquisitions this financial year to $747.3 million, and its assets under management is now $4.7 billion.
It is the second recent acquisition by the partnership, following the purchase of the 16,488 sqm A-grade office building at 201 Pacific Highway in St Leonards for $86 million.
News Corp reported in March that the race for 80 Grenfell Street was down to Centuria and Perth-based Primewest. A few weeks ago, Primewest offloaded its 60 Light Square A-grade office building in the CBD for $35 million.
German group Real I.S. had reached due diligence with a private buyer for the 16,484 sqm A-grade 77 Grenfell Street tower over the summer, with a prospective price tag believed to be around $110 million, but no deal has been forthcoming.
This sale transaction will give Adelaide’s commercial property market a shot in the arm.
According to the latest Cityscope data, Adelaide commercial property sales were down to just $102.4 million over 15 deals in the three months to April, down from $256 million the previous quarter from 9 transactions.
Lendlease’s Australian Prime Property Fund Commercial put the headquarters of oil and gas group Santos at 60 Flinders Street up for sale in the last few weeks, with hopes of fetching more than $100 million.
Australian Property Journal
