Stockland buys up Sydney’s Piccadilly Centre
Stockland will push ahead with plans to overhaul Sydney’s landmark Piccadilly Centre after taking full control of the near $700 million complex and selling off a stake in a nearby $680 million tower.
Both deals were with the Investa operation, which acquired the half stake in 135 King St and Glasshouse in Sydney that Stockland sold for $340 million.
Investa also advises Oxford Properties, which sold its 50% stake in the Piccadilly Centre to Stockland for $347 million. The combined deals, which were flagged in The Australian, took Stockland’s stake in the Piccadilly Centre, which is also the company’s head office, to 100 per cent, and boosted its ability to redevelop the building.
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Cushman & Wakefield and Savills advised on the Piccadilly Centre, and Knight Frank advised on King Street and the Glasshouse.
Sitting in the heart of Sydney, the Piccadilly Centre sits on a 4800sqm block with dual street frontages to Pitt and Castlereagh streets. It is linked to existing stations, the new George St light rail, and the coming Pitt St Metro rail station.
Stockland chief executive Mark Steinert says the group’s strategy was to recycle capital from properties that had been optimised and to invest into higher growth opportunities with redevelopment potential like Piccadilly.
As a co-owner of 135 King St and Glasshouse, Stockland had added “considerable value” by redeveloping the building into two premier Pitt Street Mall shops leased by retailers H&M and Platypus Shoes, and the office tower was almost full.
“The acquisition of the remaining stake in Piccadilly aligns with our accelerated workplace and logistics strategy, which is focused on unlocking development opportunities in Sydney and Melbourne that enhance long-term income growth and increase the valuation resilience of the overall portfolio,” Mr Steinert said.
Stockland chief executive of commercial property, Louise Mason, points to the broader “precinct renewal” in Sydney’s mid-town precinct, and said the group’s development plans would drive tenant demand and rental strength at Piccadilly.
With full control, the group can now press ahead with its plans at the same time as some rival commercial and mixed-use schemes aim to get under way in the area.
Mason says that as surrounding infrastructure was delivered, the time was right to progress its development plans at Piccadilly, which could potentially sustain a new tower.
Mason adds that selling the stake in 135 King St has enabled the deal and it will also look at the “opportunity” to introduce third-party capital to the $1 billion-plus project “at the right time”.
This article originally appeared on www.theaustralian.com.au/property.
