Blackstone sells $184 CBD office tower to Centuria Capital Group and Lederer Group

A PREMIUM Adelaide CBD tower has been bought for $184.6 million by a group that includes a billionaire sports club owner.

A PREMIUM Adelaide CBD tower has been bought for $184.6 million by a group that includes a billionaire sports club owner.

Currently leased to Bendigo and Adelaide bank, 80 Grenfell St, has been sold by US behemoth Blackstone to Centuria Capital Group in a split deal with its capital partner, the Lederer Group.

Primo Smallgoods founder Paul Lederer is chairman of the Lederer Group and of A-League soccer outfit Western Sydney Wanders.

The 23,500sq m Adelaide office tower was part of a $400 million package purchase of Rundle Place by investment group Blackstone in 2015.

The stainless steel facade of the office tower at 80 Grenfell Street, Adelaide. Picture: Andrew O'Grady

Centuria’s acquisitions now stand at $747.3 million for the 2018 financial year. Its 50 per cent stake will be offered as a single asset unlisted fund — the Centuria 80 Grenfell Street Fund — and will be open to investors later this month.

The initial investment term will be five years, with a forecast commencing distribution yield of 7 per cent.

The property has a WALE of 7.3 years and rental increases fixed at 3.75 per cent annually.

The deal was put together by leading SA sales agents, CBRE’s Ian Thomas and Guy Bennett from Knight Frank.

Centuria’s head of funds management Jason Huljich said the cut in SA’s stamp duty, to be abolished on July 1, was a major factor in the decision to buy the A-grade tower.

“It has been a positive strategic move to help drive investment into the state,” Mr Huljich said.

“The SA government’s decision to reduce stamp duty has been a positive strategic move to help drive investment into the state. Compared with other states, where stamp duty averages 5.5 per cent, SA’s is currently 1.8 per cent, moving to zero on in July.

“When transaction costs are lower, yields are higher, which means better returns for our investors. And at the same time, the SA 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.”

Mr Lederer was equally upbeat.

“Adelaide is a stable, income driven market with strong credentials and, with the support of Centuria’s property team, we are confident the asset will perform well and support the growth of our property division,” he said.

The Lederer Group has a diversified property portfolio including shopping centres, commercial office and residential properties, along with significant development projects under construction and in the pipeline.