Sale imminent for half-stake in Sydney’s Glasshouse complex
Diversified property group Stockland is at the heart of two property plays in Sydney’s central business district, with a sale of its half interest in the $700 million 135 King St and Glasshouse complex to the Investa fund that co-owns the complex imminent.
The listed group drew strong offers for its stake in the tower, with low-profile businessman Victor Comino making a strong bid for the interest in the retail and office property that fronts Sydney’s famed Pitt Street Mall.
Comino owns the adjoining building at 160 Pitt St, which has housed a Soul Pattinson pharmacy for almost 150 years, and buying the interest could have given him more sway over the famed retail strip.
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However, his offer, via a Knight Frank off-market process, appears to have been trumped by the Investa Commercial Property Fund, which has a pre-emptive right over Stockland’s half interest.
While Investa and Stockland have declined to comment, a deal for the stake is believed to have been struck at just over $340m and is close to being signed.
The Investa fund will be cashed up as it is close to selling its stake in the Telstra headquarters in Melbourne, with a Charter Hall-led group, including Canada’s PSP Investments, close to buying the entire building for about $838 million.
The Investa vehicle’s primary goal is taking full control of the 135 King St office tower, which it has been involved with since it picked up a half stake from the Colonial-managed Private Property Syndicate for $130 million in 2104.
Stockland nominated ICPF as the buyer and under a partnership manages the retail aspects, with Investa running the offices.
The building in King St is a 25-storey office tower and the Glasshouse Shopping Centre is a three-level retail centre on Pitt Street Mall. The building hosts international retail brands, with Platypus Shoes alongside H&M, sitting below the office space.
The 27,252sqm of A-grade office space offers 1200sqm floor plates and a 4-star NABERS Energy rating. Major tenants include Brookfield, Russell Investment, Moore Stephens, Regus, Gadens Lawyers and M&D Services.
Stockland held its office interest at $227.5 million on a capitalisation rate of 5% and it has a weighted average lease expiry of 3.1 years, allowing Investa to benefit from rising city rents.
The Glasshouse centre carries long leases with H&M set until late 2030, with five five-year options, and Platypus Shoes is in until mid-2026. Stockland’s interest in the retail element was held at $85.8 million on a crisp 4% capitalisation rate.
Stockland could find a quick use for the proceeds as it has the opportunity to take full control of the Piccadilly Centre.
The Australian can reveal that Stockland has been served with a pre-emptive giving it the right to buy the remaining share in the complex that is offered by Oxford Properties Group as part of Oxford’s $1.8 billion sell-off of former Investa Office Fund assets.
Stockland last year told The Australian it hoped to undertake an overhaul of Piccadilly’s retail centre and the site held the potential to develop another office tower, lifting it to a $1 billion complex.
Meanwhile, Stockland has pulled back from selling Caloundra shopping centre to Charter Hall for about $105 million. The group said it would continue with some “non-core” asset sales, but would hold Stockland Caloundra.
This article originally appeared on www.theaustralian.com.au/property.