This article is from the Australian Property Journal archive
CHARTER Hall Group has bought the Harry Seidler designed Sydney CBD office tower at 9 Castlereagh St from Stockland for $172.5 million.
As previously reported by Property Review, the Charter Hall-managed $1.7 billion wholesale Core Plus Office Fund has emerged as the buyer of the asset.
As part of the deal, the purchase price includes $4 million in income support and the payment of all outstanding incentives.
The property is expected to generate a rental income of $15.1 million on a fully leased basis.
Located in the heart of Sydney’s financial district, the 35 level, A grade office building comprises 21,000 sqm of net lettable area and is leased to variety of tenants including Tokio Marine Management, Van Eyk Research, PTW Architects and Talent 2, and has a weighted average lease expiry of 3.0 years.
The property was on Stockland’s books for $172.3 million as at June 30 2012. Stockland bought it in March 2008 as part of a $450 million asset swap deal with property investor
Terry Agnew. Stockland traded its $225.5 million Northpoint office and retail complex in North Sydney for 9 Castlereagh St Sydney, which was at the time valued at $203.5 million.
Agnew paid $121 million in 2001-2002.
The investment has cost Stockland a total of $220.1 million because the group refurbished the office floors, upgraded the foyer and plant facilities.
CPOF fund manager Chris Forbes said the acquisition increases the fund’s Sydney exposure from 19% to 27% and improves its prime asset weighting to 90% by value.
The acquisition will be funded using existing debt capacity with settlement scheduled for the end of February 2013.
Charter Hall’s joint managing director David Harrison said the medium term prospects for the Sydney office market remain positive and as such CPOF was attracted to this investment given the $8,241 per sqm is below replacement cost and represents good value when compared to new building asset sales.
Property Review
