Listed Australian property group Stockland has acquired the remaining 50% of Piccadilly Centre office complex in Sydney that it does not already own from Oxford Properties for A$347m (€212m).
In a double transaction, Stockland sold its half stake in another building and retail centre, 135 King Street and the Glasshouse shopping centre, for A340m to Investa Commercial Prime Office Fund (ICPF).
ICPF fund manager, Jason Leong told IPE Real Assets the 100% ownership delivered greater control, allowing the fund to leverage Investa’s property and asset management platform to enhance returns.
“We are very pleased to have secured a further interest in this asset which delivers on ICPF’s strategy of owning the highest quality, prime office buildings within Australia’s major CBD office markets.”
He added that its expiry profile would allow ICPF to leverage the continuing strong leasing conditions in Sydney, with tight vacancy and low levels of supply.
Stockland’s acquisition of Piccadilly Centre reversed the group’s decision in 2014 to sell half of the centre to Investa Office Fund, now controlled by Oxford Properties.
Stockland’s CEO of commercial property, Louise Mason, said: “The midtown precinct is undergoing significant renewal. Combined with our development plans, this will help further drive tenant demand and rental strength at Piccadilly.”
She added: “Obtaining 100% control of the asset simplifies the stakeholder engagement process for these plans.”
Mason said Stockland plans to introduce third-party capital to the redevelopment project when it has obtained necessary planning approvals.
She said that when Stockland sold a half-share of Piccadilly in 2014, the proceeds were used to grow its logistics portfolio, which had delivered “above-hurdle” rates of return.
“Now, with the broader precinct renewal and surrounding infrastructure delivery, the time is right to progress our development plans at Piccadilly by moving to 100% ownership.”