British insurer sweet on stake in North Sydney’s Coca-Cola Place
M&G Real Estate, a unit of British insurer Prudential PLC, is eyeing the purchase of a half stake in the prominent building in North Sydney known as Coca-Cola Place, which is being offloaded by South Korea’s National Pension Service in a deal valuing the entire tower at close to $450 million.
The move puts on display the depth of demand for North Sydney office property where players including Dexus, Winten and now Lendlease have towers either under way or planned.
But the British group’s interest in the stake may be trumped by the asset’s co-owner, the Investa Commercial Property Fund, which holds pre-emptive rights.
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The deal is now subject to behind-the-scenes talks. Industry figures suggest an outcome will emerge within days.
ICPF, which has sold its near 20% stake in Investa Office Fund to Canada’s Oxford Properties Group, could either undertake the purchase itself or nominate a third party.
The parties and agents Savills and JLL declined to comment.
Whichever deal is consummated it would be another marker for North Sydney’s hot office tower market, where a deep field of bidders are chasing Zurich’s $350 million tower, and Lendlease is in pole position to deliver the integrated development of the proposed Victoria Cross station.
South Korea’s NPS in September put two major office assets in North Sydney and Melbourne up for sale as it looked to realise gains after buying early in the cycle.
The group, represented by US firm PGIM Real Estate, is selling its interests in two towers it bought from Investa and its funds seven years ago.
It is also selling Melbourne’s 595 Collins St tower, which could garner more than $315 million.
The sovereign vehicle bought its interest in the North Sydney tower stake from Investa for about $113.5 million in 2011. Values in the area have since soared as commercial and residential players chase new assets.
Spanning 28,500sqm over 21 floors, the Mount St tower houses Coca-Cola Amatil and a mix of quality private sector tenants including Goodman Fielder.
The sale is being handled by JLL and Savills but they and the parties declined to comment.
PGIM bought the stake on behalf of institutional investors in its Asia Real Estate Fund that were reported to include the South Korea vehicle.
M&G Real Estate has emerged as a major purchaser of Australian commercial assets and has teamed with Mirvac Group to back the $800 million office tower that it is proposed Suncorp will occupy in Brisbane’s CBD.
M&G will take a half stake in that complex.
M&G made its first Brisbane acquisition with the $119.1 million purchase of HQ South in Fortitude Valley last year. In December 2016, the firm bought the Casey Centre, a Melbourne retail property asset, from Scentre Group for more than $220 million.
Meanwhile, Singaporean company UOL Group last night confirmed a report it was in talks to buy a St Leonards tower.
UOL says it is in early talks about buying an asset, which has been identified as the new Mastercard offices being sold by Proprium Capital Partners Australia for about $154 million.
This article originally appeared on www.theaustralian.com.au/property.
