This article is from the Australian Property Journal archive
CROMWELL Property Group has teamed up with South Africa's Redefine Properties Limited to buy the Northpoint Tower office building in North Sydney for $278.7 million.
The property will be the foundation asset for a new unlisted wholesale investment trust, the Cromwell Partners Trust, which will be managed by Cromwell and will be owned initially 50/50 by Cromwell and Redefine Properties.
Located at 100 Miller St, the 42-level Northpoint is North Sydney’s tallest office tower with a total land area of more than 5,000 sqm and a net lettable area of 35,145 sqm.
Cromwell CEO Paul Weightman said the property is one of Sydney’s best commercial and retail repositioning opportunities.
“We believe the Sydney CBD and North Shore markets offer significant potential over coming years and Northpoint is well positioned to benefit from any upswing in business confidence and the growing demand for retail services from the more than 75,000 permanent residents in North Sydney.
“It is extremely well located, has a diversified income stream and offers excellent potential for value adding investment. The asset will benefit from a refurbishment and repositioning programme that Cromwell proposes to commence in the 2014 calendar year,” he added.
Redefine and Cromwell will both contribute approximately $80 million equity towards the purchase price, with the balance to be funded by a new debt facility. Cromwell’s equity portion will be sourced from capital recycled from recently announced asset sales and existing cash reserves.
Weightman said over time, the Cromwell Partners Trust may also acquire other assets and may also conduct further equity placements to new wholesale investors.
Completed in 1977, Northpoint was last refurbished in 1997. The building comprises a 34 level office tower consisting of three rises, built above a three level retail podium including dual street frontage to Miller St and Pacific Highway, with six levels of basement car parking for 423 vehicles.
The sale was negotiated by Scott Gray-Spencer from CBRE.
After allowance for recent and potential future asset sales, the acquisition of Northpoint and expected fee income from managing the Trust, Cromwell now expects operating earnings for FY14 to be at least 8.4 cents per security, an increase from previous guidance of 8.3 cents per security.
On completion of the acquisition, Cromwell Property Group’s portfolio is expected to comprise a total of 32 properties valued at approximately $2.4 billion. Cromwell continues to explore options for divestment of a limited number of smaller, non-core assets.
Last week Cromwell sold two assets totalling $154 million, the AWB Building at 380-390 La Trobe St in Melbourne’s CBD for $113.6 million to Invesco Australia, and the HomeBase bulky goods centre at Prospect, 30km west of Sydney’s CBD for $40.45 million, to Altis Property Partners.
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