Charter Hall spends $172.5 million on Harry Seidler-designed Castlereagh Street office
Charter Hall Group’s $1.7 billion Core Plus Office Fund has spent $172.5 million on the purchase of a Harry Seidler-designed Castlereagh Street, Sydney, office tower.
The 35-level, 1989-built Castlereagh Street office was sold by Stockland through Josh Cullen and Michael Andrews of CBRE.
It's the one with the impressive hanging gardens.
On its completion, with tenants including Tricontinental, Credit Lyonnaise and merchant banking group Fay Rich White, the office tower had gardens on the ground level, landscaping on level nine, more gardens on level 13 and 15, palm trees on level 19 and a single tree on level 31.
It first sold in 1994 for $78.1 million when Capita Finance Group sold what was then known as the Capita Centre to Singaporean Straits Steamship Land.
It last sold in 1998 for $112 million.
Stockland, the diversified property group, has been exiting its office and industrial holdings to focus on its retail, residential and retirement property portfolio.
The 9 Castlereagh Street sale reflects a likely yield of around 8% as it is expected to generate a rental income of $15.1 million on a fully leased basis.
The purchase price includes $4 million in income support and the payment of all outstanding incentives.
Its sale price was just above Stockland’s June 2012 book value of $172.3 million.
The building comprises 21,000 square metres of net lettable area, with tenants including Tokio Marine Management, van Eyk Research, PTW Architects and Talent 2.
The CPOF had been seeking to buy in Sydney for some time with the purchase increasing CPOF’s Sydney exposure from 19% to 27%.
“We believe the medium-term prospects for the Sydney office market remain positive and as such CPOF was attracted to this investment given the $8241 per square metre is below replacement cost and represents good value when compared to new building asset sales,” said Charter Hall joint managing director David Harrison.
