Centuria targets significant investor visa aspirants with Sydney office property syndicate investment opportunities
Centuria’s fast expanding property funds management business is targeting Asian investors looking to qualify for the $5 million significant investor visa (SIV) with all its unlisted property trusts now compliant with the program.
It comes as Centuria settled on its acquisition of the 17-level 175 Castlereagh tower from Stockland for $56 million and launched its latest single property syndicate for its 10 Spring Street acquisition.
ASX-listed Centuria, which plans to launch a listed property trust later this year headed by former Mirvac boss Nick Collishaw, bought the 10 Spring Street office tower from John Swire & Sons for $91.6 million with its 10 Spring Street Fund offering investors a forecast distribution of 8%.
The 175 Castlereagh fund launched in February offering a return 9% in its first year growing to 9.25% in year two and closed oversubscribed.
Centuria entered into a conditional contract to acquire the building from Stockland in January and settled this week on an initial yield of 7.7%.
A brochure advertising the 10 Spring Street Fund, which has a minimum $100,000 requirement to be held for 5.5 years and closes on June 13, says it is a "complying investment for investors seeking nomination by the NSW State Government for a Significant Investor Visa (SIV)", which requires a minimum $5m investment.
Jason Huljich, CEO of Centuria Property Funds, tells Property Observer, in the last few months, there has been a noticeable increase in enquiries from investors with significant visa aspirations.
He explains that investors do not need to invest the entire $5 million in one hit, but can spread it around over a number of investments.
Investors cannot qualify for a visa by making a direct $5 million property investment but can invest in unlisted managed fund that holds Australian direct property assets.
“Many of the investors in our 175 Castlereagh fund were high net worth individuals who invested above the $100,000 minimum requirement,” Huljich says.
No SIVs have yet been issued by the Department of Immigration, but Property Observer reported last week that 222 invitations had been issued to investors, 212 of them to Chinese investors.
Almost half (101) of these invitations are for applicants looking to invest in NSW, with 81 in Victoria and 29 in Queensland.
Commenting on the decision to buy 175 Castlereagh Street, Huljich said Centuria liked the mid-town location right next to the new 43 level ANZ building at 161 Castlereagh nearly completed by GPT, which is sparking a revival in what has been a somewhat unloved part of the Sydney CBD.
“It’s tidying up the area and also adding retail to the mix,” he says.
The building was valued at $53 million by Stockland last year covering 12,000 square metres of office space over 13 levels plus four levels of underground parking and ground floor retail.
”Stockland had spent a lot of money refurbishing 175 Castlereagh and it now has a NABERS Five Star energy rating," sasy Huljich.
The building is anchor tenanted by a number of NSW state government departments, which have just renewed their leases for three and four year terms, lifting the weighted average lease expiry (WALE) term from 1.4 years to in excess of three years.
The 2012 Stockland property portfolio review says the building brings in passing rent of $521 per square metre placing it in the mid-range of Stockland’s office portfolio.
Stockland has its headquarters just down the road at 133 Castlereagh and also owns 9 Castlereagh, the Harry Seidler designed 31 level A grade office tower, valued at $172.5 million.
