CBRE Global Investors has acquired 118 Mount Street, a 21,012-square-meter trophy office development in North Sydney for A$350m ($239m), via a fund-through transaction on behalf of a German real estate Spezialfonds.
The building is being developed by Zurich Insurance Group to house the headquarters of Zurich Financial Services Australia, which will occupy more than 64 percent of the building.
Located on the eastern side of the North Sydney precinct, the office property is well-located adjacent to the motorway that runs over the Sydney Harbour Bridge and provides uninterrupted harbor and city views from the majority of levels.
With completion expected in Q4 2020, it boasts three street frontages and will feature 817-square-meter floor plates, a lobby café, rooftop terrace and high-quality end-of-trip facilities.
“The North Sydney market is undergoing a revitalization with a significant infrastructure spend,” said Chris Johnston, Managing Director-Australia and New Zealand, CBRE Global Investors. “We are excited about how this market is evolving and the opportunity for our client to be part of that revitalization as the owner of a development of this size, quality and location.”
”Zurich Insurance Group has a systematic and structured investment approach,” said Reto Buehler, Zurich’s Head of Real Estate of Australia. “Our mission is to achieve superior risk-adjusted returns relative to the Group’s liabilities. With the sale and leaseback of 118 Mount Street, we have achieved important milestones as this property will provide our Australian business with new purpose-built headquarters and support the optimal diversification of our global real estate investment portfolio. Notwithstanding the sale, Australia will remain part of our global investment strategy.”
Cushman & Wakefield International Directors of Capital Markets Australia & New Zealand, Richard Butler and Mark Hansen, exclusively represented Zurich in the transaction.
“The sale of 118 Mount Street highlights the ongoing strength of institutional demand for assets in North Sydney, a precinct that continues to undergo a significant transformation,” Hansen said. “The North Sydney office market continues to be a destination of choice for global capital, having attracted more than $1 billion in investment in the past 12 months from Singapore, USA, United Kingdom, Hong Kong and Mainland China.”
“North Sydney is expected to outperform in the short term with occupier demand supported by attractive rents compared to the Sydney CBD,” Butler said. “Over the longer term, we expect North Sydney rental growth to accelerate and spreads relative to the CBD to contract.”