$525m seals Brisbane’s biggest property deal of 2019
The listed Cromwell Property Group has finalised the largest property investment in Brisbane this year, buying a George Street office block from US private equity group Blackstone and German group HSBC Trinkaus for $524.75 million.
The purchase in the city’s North Quarter precinct, comes as Brisbane’s commercial property market is on the rise with vacancy falling to 11.9 per cent.
Cromwell chief executive Paul Weightman, flagged more big deals, potentially including sales, noting its had recently sold its half stake in the $600m Northpoint Tower in North Sydney.
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Cromwell sold the interest in Northpoint Tower for $300 million to Hong Kong group Early Light International and also raised $407.5 million via an institutional placement and a security purchase plan.
Proceeds of these activities, alongside the sell down of existing funds, will be used to continue to fund opportunities identified as part of Cromwell’s “Invest to Manage” strategy.
The group is undertaking a range of developments including a hotel and office building in Sydney’s Chatswood and exploring a build-to-rent tower in the Melbourne CBD.
400 George St, Brisbane CBD. Picture: Supplied
“Our focus on executing strategy and creating securityholder value will continue, and we have a number of other accretive opportunities in the pipeline,” Weightman says.
Cromwell has been at loggerheads with its major shareholder, Singapore’s ARA Asset Management, over corporate governance issues and beat an ARA-run fund to the purchase of the Brisbane building.
The complex at 400 George St is a 35-level building built in 2009 with a net lettable area of 43,978sqm spread across office, retail and childcare.
It has blue-chip corporate and state and commonwealth government tenants, giving it a weighted average lease expiry of close to five years.
The Australian flagged the deal in June and it was brokered via Luke Billiau and Seb Turnbull of JLL and Bruce Baker and Flint Davidson of CBRE.
The A-grade building was developed by Leighton Properties and Grosvenor. Leighton sold its half-interest to Trinkaus in 2007 for $210m and Grosvenor sold its half-stake in 2013 for $178 million to South Australia’s MAC.
Blackstone picked up its half-interest when it bought the $500m-plus MAC portfolio, paying about $210 million.
This article originally appeared on www.theaustralian.com.au/property.
