Centuria has teamed with MA Financial to acquire Adelaide’s Grenfell Centre, also known as The Black Stump.
The $166.6 million deal is with Blackstone, which picked up the office as part of its $700m takeover of Soilbuild REIT last December.
That seller paid Credit Suisse $134.22m in August, 2019.
The building previously traded three years earlier for $124m then underwent a modernisation.
The latest trade – struck at a 6.8 per cent yield – comes six weeks since Centuria announced plans for to build a six storey, 4600 square metre A-grade on a car park beside its 80 Flinders Street.
Acquired in equal parts, Centuria and MA Financial have earmarked the Adelaide building – 25 Grenfell St – for a closed ended unlisted fund.
Developed in 1973, the asset contains about 24,969 square metres over 23 floors; this component is presently 10pc vacant (which Blackstone covered with an 18-24 month rental guarantee).
The ground level is fit out with 10 retail tenancies.
There is also a 30 bay basement car park.
The property’s Weighted Average Lease Expiry is four years.
The site spreads 1968 sqm.
Centuria said 72pc of the investment’s income is derived from government and blue chip tenants, amongst them SA Health, the office of the minister for Energy and Mining, the Reserve Bank of Australia, Aurecon, Lipman Karas and Minter Ellison – the latter which has just renewed its lease for seven years (story continues below).
JLL – one of the agencies that just sold it – also occupies space and holds signage rights.
The tower is opposite the southern entrance of the City Cross shopping centre, and an adjoining office, which Con Makris sold to Revelop earlier this year for $60m.
The northern boundary of that retail asset fronts Rundle Mall.
Centuria and MA Financial will soon launch a capital raising to generate $47m for a refurbishment.
“This acquisition represents an opportunity to capitalise on the strong tenant demand for high quality A-grade office space within Adelaide’s prime CBD,” Centuria joint chief executive officer, Jason Huljich said.
“Adelaide’s office leasing enquiry levels are trending strongly above pre-COVID levels, with a 42pc increase in the 12 months to Q2 2021,” he added.
“We believe we can deliver core-plus returns by repositioning this iconic asset to retain and attract high quality tenants, while also further bolstering leasing demand for the property”.
Also today, we are reporting Centuria has outlaid $177m on a Warragul farm offered mid-year by Roc Partners.
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