This article is from the Australian Property Journal archive
BLACKROCK Real Estate has confirmed the $279 million acquisition of the Zenith office asset in Chatswood and said it is looking at similar opportunities across the market.
The Zenith was acquired jointly by a BlackRock-managed private fund and the Centuria Zenith Fund, an unlisted property fund managed by Centuria Property Funds.
The Zenith is a landmark office asset with a diversified tenant mix. It is currently 94% occupied, with 40% of its rental income underpinned by government tenants. The property has approximately 44,000 sqm of net lettable area, with 800 car spaces occupying an 8,000-sqm site.
BlackRock’s director of real estate Australia Hamish MacDonald said the favourable office market dynamics in Sydney make The Zenith an appealing risk-adjusted investment opportunity.
“We look forward to adding value to this property to meet the needs of current and future tenants, while continuing to seek similar opportunities across the market,” MacDonald said.
Centuria unlisted property funds CEO Jason Huljich said investor demand for the fund has been high and that the fundamentals of Sydney’s north shore office market are strong.
“In the current environment of market volatility and low interest rates, investors are looking for quality investments that will deliver strong and stable yields, with the potential for capital growth over time. The Zenith Fund is forecast to provide distribution yields of 7.6% in the 2017 financial year, growing to 7.7% in the 2018 financial year,” he added.
The settlement follows Centuria’s recent announcement that it had settled the sale of two properties at Macquarie Park, in Sydney’s north. The properties at 80 Waterloo Road and 16 Byfield Street were sold to developer Golden Age for $101 million.
Centuria purchased the properties for $24 million in 2001, before the Chatswood-Epping rail line was built and the Macquarie Shopping Centre refurbished.
Australian Property Journal
