80 Flinders St snapped by up Sydney investment group
One of the Adelaide CBD’s most high profile office buildings has sold this morning for a whopping $127 million.
One of the Adelaide CBD’s most high profile office buildings has sold this morning for a whopping $127 million.
The SGIC badged 80 Flinders St has been bought by the Sydney based, and ASX listed, Centuria Capital Group as Adelaide continues to bring in interstate investment on the back of a tranche of incoming projects set to realign how the state does business.
The purchase comes on the back of the Centuria purchase of Bendigo & Adelaide Bank’s Adelaide head office at 80 Grenfell St for $185 million last year, a joint acquisition with the Lederer Group. “As a market, Adelaide is continuing to transform through a strong pipeline of approximately $130 billion of infrastructure and defence projects as well offering fundamentals relative to other core CBD markets,” Centuria joint chief executive officer, Jason Huljich chief executive said.
Indeed Adelaide is shaping up as a very appealing business proposition, Centuria head of funds management Ross Lees said. The pipeline is strong.
“It’s not an accident we are investing in the market,” he said. “There is a low vacancy rate of 2.3 per cent in the A grade office space. There is a massive amount of defence capital coming in (about $90 million) plus transport upgrades and BHP improvements at Olympic Dam and the 10 Gig City network.”
The approach the State Government has taken around transaction costs in eliminating stamp duty on commercial property has been a big pull he said.
Unconditional contracts on 80 Flinders St have been exchanged between Centuria subsidiary, Centuria Property Funds Ltd and vendor Lendlease. The purchase will make specialist investment manager Centuria, Adelaide’s second largest institutional landlord of A grade assets. It currently controls an overall $5.6 billion property portfolio.
The Flinders St building, which has blue chip tenants including IAG, BAE Systems and Beach Energy, has recently undergone an extensive upgrade to its lobby, on-floor and bike, locker and shower facilities.
The 12,154sq m office building, which was constructed in 2006, sits on a 4387sq m site and is 100 per cent leased. It has a multi-deck carpark consisting of 694 spaces and which is leased to Wilson Australia.
The purchase will see a new, unlisted Centuria fund launched next month with a distribution yield of 6.5 per cent expected at the end of FY20 and 6.6 per cent in FY21.
Micah Schulz, fund manager with the Lendlease managed vendor Australian Prime Property Fund, said the sale is an outstanding result.
“Consistent with our other divestments in recent years, we will continue to focus on recycling our capital into world class, next-generation precincts with connectivity, activation and amenity that offers a superior worklife experience for our customers,” he said.
The sale was managed by Guy Bennett of Knight Frank and Ian Thomas of CBRE.