British group puts fizz in Coca-Cola Place stake
British group M&G Real Estate has teamed up with the wholesale funds arm of Investa Property Group to take a stake in Coca-Cola Place in North Sydney in a deal valuing the entire building at about $440 million.
The British group said it would acquire a 25% interest in the A-Grade office building at 40 Mount Street for $109.5 million in a deal in which Investa Commercial Property Fund, will lift its interest in the building from 50% to 75%.
The half stake in the tower that is transacting is being sold by South Korea’s National Pension Service, represented by US firm PGIM Real Estate, and the deal was brokered via Savills and JLL.
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After their sales campaign, co-owner PGIM offered its half interest to ICPF in a pre-emptive rights process.
The Investa fund then partnered with M&G Real Estate to acquire a 25 per cent interest each in the tower.
“In line with strategy, we have increased ICPF’s exposure to the attractive North Sydney market and delivered further diversification,” ICPF fund manager Jason Leong said.
M&G says the transaction is its second joint venture with ICPF, which has assets of more than $5 billion, and it considers Investa a long-term strategic partner.
M&G Real Estate made the investment on behalf of its core Asia property strategy managed by Richard van den Berg. The group is working on increasing its exposure in Australia, he says.
“Australia’s economy continues on a positive trajectory and demand for modern office assets continues to increase as vacancy rates in North Sydney are expected to tighten from 6.1% in mid-2018 to 5.7% by the end of 2018 due to positive leasing activity,” van den Berg says.
The firm earlier invested in Sydney, taking a stake in 400 George St in the Sydney central business district with ICPF in 2006, and this year it bought a half-stake in Suncorp’s new Brisbane headquarters being built by Mirvac.
The British company says demand for office space, particularly in North Sydney’s CBD remained strong due to continued infrastructure and residential development, the growth of the finance, business services and technology sectors, and supply constraints up to 2020.
Coca Cola Place was built in 2010 as an office and retail building comprising 25 storeys and comprises 28,552sqm of space.
It is well positioned near the upcoming Victoria Cross Metro Station. It is fully occupied with long-term anchor tenants, including Coca Cola and Vodafone.
This article originally appeared on www.theaustralian.com.au/property.
