Abacus does its homework on high-rise

Abacus Property Group could emerge with a slice of one of Sydney’s premier office buildings.

The high-rise at 201 Elizabeth street, Sydney owned by Dexus and the Perron Group.

Abacus could emerge with a slice of one of Sydney’s premier office buildings as it has gone into due diligence on an interest in a tower being sold by Dexus and the private Perron Group for about $650 million.

Abacus, now led by Steven Sewell, has been targeting larger institutional-grade property plays, and is cashed up from an equity raising in which it indicated major office moves would become a focus.

The group last week completed its $250m equity raising, saying that it would pursue opportunities including the acquisition of the Australian Unity Office Fund as part of a consortium with Charter Hall.

Abacus said when launching the raising that it was in due diligence on a stake in a Sydney CBD office asset.

It said it would spend $220m and then help to reposition the asset.

The Australian understands that it is looking to team up with Charter Hall, which has already been identified as being in due diligence on the Dexus and Perron complex.

The skyscraper at 201 Elizabeth Street, once touted as Sydney’s next opulent hotel and apartment tower, is expected to remain as an office block as rentals in the city lift, while hotel and apartment projects have been sidelined.

The owners added value to the building by winning approvals for the luxury development, under which a five-star hotel and 250-unit apartment tower plan would have replaced the existing 38-level office block.

However, the market has cooled and the Western Australia-based group is taking a more passive stance.

The tower’s value has jumped since it was almost sold for more than $400m in 2014 to China’s Dalian Wanda.

The parties declined to comment.

Abacus and Charter Hall last month submitted a sweetened non-binding proposal to acquire the remaining units in ­Australian Unity Office Fund, in which they hold a 19.9 per cent stake. Abacus said last week that it had identified more than $710m of value-accretive opportunities on which it would spend the raising proceeds.

Mr Sewell said then the group was shifting towards being a high-conviction active owner, investor and manager of long-term value-enhancing investments.

Charter Hall and Abacus could emerge with even closer ties if a deal is done.

In addition to the Australian Unity portfolio, picking up the A-grade office tower overlooking Hyde Park would mark one of Sydney’s largest office repositioning plays.