China Investment Corporation (CIC) has bought an additional 50% stake in a Sydney office tower for A$925m (€568m) from Dexus and Canada’s CPP Investment.

Dexus said it has sold half of the Grosvenor Place building, a deal which lifts CIC’s holding in the building to 75%.

Chinese sovereign wealth fund CIC initially inherited a 25% interest in the asset in 2015, as part of its purchase of an office portfolio from Investa.

Australia’s Commonwealth Super Corporation, the pension fund for federal public servants and Australia’s defence force, owns the remaining 25% in the 44-level office tower.

Dexus and its wholesale fund, the Dexus Office Partner, had each owned 25% of Grosvenor Place. CPP Investments is the co-investor in the Dexus Office Partner.

Dexus CIO, Ross Du Vernet, said: “This transaction continues our asset recycling strategy, realising value for both Dexus and our Dexus Office Partner.”

Dexus group realised A$694m from the sale, representing a discount of about 5% to its book value at 30 June 2020 to reflect the current vacancy and short-term leasing risk in the tower.

Stuart McCann, head of international capital Pacific and Southeast Asia at CBRE, which handled the sale, said the Grosvenor process uncovered several new offshore entrants to the Australian office market.

“These investors are actively seeking strategic and long term partnership stakes in core Sydney office property, a trend we see continuing as assets which have traditionally been tightly held continue to become available,” he said.

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