Zurich Insurance pockets big return on North Sydney tower

The deal is the latest marker in the area’s office boom and a potential pointer to more companies developing towers they will occupy, although Zurich had long owned the site.

But it marks a bold commercial property play by a financial services company, with the Swiss-headquartered group developing the tower for its local offshoot, Zurich Financial Services Australia, which will occupy more than 64% of the building.

Commercial Insights: Subscribe to receive the latest news and updates

With the tower expected to be completed in the fourth quarter of 2020, it will be one of the swankest in the district that has already drawn NBN and Nine Entertainment.

The 21,012sqm building will sport a lobby cafe, rooftop terrace and high-quality end-of-trip facilities. It is targeting a 5-Star NABERS Energy rating and 5-star Green Star rating.

CBRE Global Investors bought the complex at 118 Mount St via a fund-through transaction on behalf of a German real estate, Spezialfonds.

“The North Sydney market is undergoing a revitalisation with a significant infrastructure spend,” CBRE Global Investors managing director, Australia and New Zealand, Chris Johnston, says.

Cushman & Wakefield’s Richard Butler and Mark Hansen represented Zurich in the deal.

“The sale highlights the ongoing strength of institutional demand for assets in North Sydney, a precinct that continues to undergo a significant transformation,” Hansen says.

Butler says over the longer term North Sydney rental growth will accelerate and spread relative to the CBD will contract. Building of the new Victoria Cross Metro station and a new Metro rail link connecting North Sydney station to Barangaroo and Martin Place, to be completed in 2024, is boosting the area.

This article originally appeared on www.theaustralian.com.au/property.