Centuria set to pay $190m for Adelaide tower
The acquisitive Centuria Capital Group has edged ahead of West Australian funds manager Primewest in the race to secure the prime position to buy an Adelaide office tower that US group Blackstone is selling for about $190 million.
Under the deal, Centuria would acquire 80 Grenfell St, a top-class tower that Blackstone offered after picking up Adelaide’s Rundle Place shopping centre and office development in late 2015 for $400 million.
The listed Centuria has fast become one of the country’s most active property buyers as it rolls out its value-adding philosophy.
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This month the company spurred expectations of a corporate deal after confirming it held talks with the Warburg Pincus-backed e-Shang Redwood Group about its strategies for rival listed player Propertylink Group.
A combination between the pair could see Propertylink taken over and its industrial real estate and property funds arms carved up between the bidders, with ESR focused on the warehouses and Centuria chasing further funds to grow its $4 billion empire.
Buying the Adelaide tower would fit well with Centuria’s unlisted arm, which has been highly active, including with the purchase of the Transport Accident Commission building in Geelong for $115.25m in January.
Centuria has also expanded financial adviser access to the Centuria Diversified Property Fund, which holds stakes in 11 unlisted Centuria funds. These own 13 properties in Sydney, Geelong, Brisbane, Canberra and Perth. The group’s listed metro office fund also acquired stakes in two NSW towers for $119.1 million in St Leonards and Wollongong in December.
Primewest was thought to be acting on behalf of a Korean fund, but the parties and agents Knight Frank and CBRE did not comment yesterday. The pool of Adelaide buyers has become deeper with Singapore’s Mapletree and AEP both buying buildings.
Blackstone fielded interest in the tower from Singapore-based ARA Asset Management just months after it bought the complex. It is almost fully occupied by Bendigo and Adelaide Bank on a 12-year lease expiring in November 2025 with four five-year options. It has 2180sqm of floor plates and will trade on a yield of about 6%.
This article originally appeared on www.theaustralian.com.au/property.
