The two joint owners, Centuria Capital Group subsidiary Centuria Property Funds Limited and US giant BlackRock, have sold A-Grade office complex, The Zenith, on the north shore of Sydney to a joint venture between an affiliate of Starwood Capital Group and Arrow Capital Partners for A$438.2 million (US$307.09million).
The A-Grade office complex was acquired for A$279.1 million in 2016 by Centuria and Blackrock, said Centuria in ASX announcement.
The iconic A-Grade office complex is located in the heart of Sydney’s North Shore office market in close proximity to Chatswood Station, at 821 Pacific Highway approximately 12 kms North of Sydney CBD. It has a net lettable area of 475,000 SF with 785 parking spaces.
The Zenith is an iconic A-Grade office complex comprising twin 21 level towers and basement parking.
James Fogarty, Vice President of Starwood Capital Group commented: “Starwood Capital Group is pleased to continue its targeted investment strategy in Australia, an economy we believe is underpinned by strong fundamentals that drive further strength in the Greater Sydney office market. We like the North Shore office market, and Chatswood in particular given the limited supply, robust demand and transformative infrastructure improvements that are underway. The Zenith is a landmark within the Chatswood market and has strong appeal to tenants across a range of sectors and provides high quality space to users at a competitive price point.”
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Kurt Wilkinson, Partner Arrow Capital Partners said “The Zenith in Chatswood is the second Sydney acquisition with Starwood in the last year. The Zenith is the premier A grade asset in Chatswood, is on a uniquely large landholding, and is underpinned by a high quality tenant base in a market with strong fundamentals. We intend to inject further capital and asset management expertise to enhance the offering to our tenants and ensure that the Zenith remains the standout office asset in the Chatswood office market.”
Jason Huljich, Head of Real Estate and Funds Management at Centuria, said: “With support from Centuria’s in house real estate team and national distribution capability, The Zenith represents another example of our ability to identify opportunities and implement value add strategies for real estate with a view to delivering quality assets for our investors and more attractive properties for our tenant customers.”
“Whilst it was originally intended that the property be held over a longer period, buyer interest in the property was extremely strong. Investors in the Centuria Zenith Fund have benefitted from attractive quarterly distribution returns as well as enjoying a substantial capital gain from the sale reflecting the strong rental yield and capital growth driven by extremely strong market conditions. Success for The Zenith has been further underpinned by Centuria’s collaborative approach alongside our wholesale partner, BlackRock, resulting in milestones from the asset plan being achieved ahead of schedule,” he added.
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