Hong Kong buyers snaffle Sydney towers worth $450m
A Hong Kong real estate magnate and a fund manager hailing from the territory have signed two separate deals to buy Sydney office towers for more than $450 million.
The two deals — by Hong Kong billionaire Francis Choi and fund manager CLSA with a Japanese partner respectively — show that HK players are stepping up buying even as some mainland Chinese groups retreat from aggressive bids for city towers.
In one play, HK-based Choi, one of China’s largest toy manufacturers, has purchased 1 Castlereagh St from US firm Blackstone for over $220 million.
Commercial Insights: Subscribe to receive the latest news and updates
Choi has already put his stamp on the Sydney office market, snapping up the Exchange Centre in Bridge St from Malaysia’s KWAP in April for $335 million.
Blackstone tapped Sharon Yang, James Parry and Michael Andrews of CBRE and James Quigley and Paul Fernandes of Cushman & Wakefield to sell the complex but they and the parties did not comment.
The sale of the 22-level building, bought from Mirvac as part of a portfolio three years ago, represents a strong result for Blackstone. The US group reworked the tower, refurbishing the lobby, lift lobbies and bathrooms, and split the floors.
Hong Kong billionaire Francis Choi has bought 1 Castlereagh St in Sydney.
It also won approval to increase the space, boosting the value of the tower, especially the retail element, with the 11,500sqm property selling at more than $19,000 a sqm.
But in a separate move it has taken an Adelaide tower — 80 Grenfell St — an office tower picked up as part of its $400 million purchase of Adelaide’s Rundle Place shopping complex and tower off the market.
Meanwhile, the unlisted Investa Commercial Property Fund has also been successful in Sydney, selling 130 Pitt St for $229 million to PA Realty, a joint venture between CLSA Real Estate and Mitsubishi Estate Co and, on an initial yield of 3.7%, or a rate of about $21,000 per sqm.
Acquired by ICPF for $112.15 million in 2007, the 10,098sqm complex is near the MLC Centre, walking distance to Pitt Street Mall and Town Hall Station.
ICPF fund manager Jason Leong says the sale “delivers on ICPF’s strategy of divesting non-core assets within the portfolio at an opportune time in the cycle”.
“The transaction achieves a strong result for investors, delivering a premium to current valuation,” he says.
Ben Azar and Ian Hetherington of Savills and Josh Cullen and Rick Butler of Inc RE handled the sale.
This article originally appeared on www.theaustralian.com.au/property.
