More mid-town residential looms as GDI secure 233 Castlereagh Street, Sydney deal

More mid-town residential looms as GDI secure 233 Castlereagh Street, Sydney deal
Jonathan ChancellorDecember 7, 2020

GDI Funds Management Limited has entered into a conditional put and call option deed for the sale of 233 Castlereagh Street, Sydney for $156 million.

The B-grade office price represents an increase of $27 million compared to the June 2014 independent valuation. It is a 31 level 1976-built commercial office tower located in the southern end of the Sydney CBD within close proximity to the Downing Centre. 

It has been speculated Asian development interests were the intending buyers.

GDI Property Group recently leased a 1,800-square-metre office suite for the filming of the upcoming political drama Truth, starring Robert Redford and Cate Blanchett.

The film is based on the 2005 memoir Truth and Duty: The Press, the President, and the Privilege of Power.

Based on 60 Minutes producer Mary Mapes' 2005 memoir, the movie centres on the 2004 scandal that erupted after US news anchor Dan Rather reported that then president George W Bush received preferential treatment to avoid the Vietnam War draft.

Robert Redford will play the famous American anchor, while Cate Blanchett will portray producer Mary, who was subsequently fired over the story. 

The short-term lease was negotiated by Brendan Shipp and Thomas Fredriksen of Knight Frank, who said the movie directors needed nondescript views, as the movie is based in New York City.

Filming was expected to take eight weeks with the tenant paying about $100,000 a square metre gross for the space.

The GDI Property Group Steve Gillard said the sale was a great result and validated the GDI Property Group business model of buying well‐located CBD office properties with multiple exit options.

The option deed is conditional upon GDI Property Group procuring by September 2015 amendment of the covenanted restriction in relation to the allowable gross floor area.

GDI Property Group is confident that it will approve the amendment or replacement of the restriction on use.

Other key terms of the option deed include a $1 million call option fee has been paid.

GDA had previously advised in the GDI Property Group prospectus that it had been investigating the feasibility of alternative redevelopment options, including residential conversion, for its property at 233 Castlereagh Street, also known as 324 Pitt Street. 

In 2006 Leighton Properties Pty Limited (LPPL) and Lend Lease Real Estate Partners 1 Limited announced that they had exchanged contracts with SAITeysMcMahon, an Orchard Funds Management entity, for the sale of 233 Castlereagh Street at a price of $120 million.

It was transferred again in 2010 at $102 million. 

Quality office tenants over the years have included Moray and Agnew and more recently Copyright Agency, Carlson Wagonlit Travel and General Pants Co. The property known as Telstra House was owned by Telstra until selling at $55 million in 2002.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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