Centuria sheds Sydney office
Centuria has sold a Lower North Shore office purchased in 2006, when it was part of the Over Fifty Group and known as Century Funds Management.
The Chatswood asset, 7-9 Help Street, cost $38.2 million then.
It was valued at $43m when the Centuria Office REIT was listed in 2014.
The disposal price, to a local private investor, is $90m – a 109 per cent capital gain for unitholders.
It is also a 12.5pc premium to the most recent book value.
Settlement is scheduled July.
Office held 20 years
Completed in 1991 and renovated in 2010, the Chatswood office, known as 9 Help St, contains 9397 square metres of A-grade area over nine floors with the seventh level fit out as a co-work space.
Part vacant, the NABERS Energy rating is 5-star.
There are also 142 car parks across three basement levels (continues below).
The site spreads 2488 sqm about 250 metres from Chatswood train station.
“The divestment is consistent with the REIT’s focus on strengthening its balance sheet while also improving portfolio quality,” COF fund manager, Belinda Cheung, said.
Centuria head of Funds Management, Jesse Curtis, said “sentiment to the office sector is changing on the back of increased office-based work driving tenant demand and limited near term supply”.
“Development feasibilities have become challenging with higher construction costs widening the gap between replacement value and prevailing valuations, which we believe will drive market rents,” he added.
“The amount of office space is also diminishing with the rising trend of secondary office assets converting to alternate use, such as apartment buildings, hotels, life science, education or build-to-rent projects,” according to the executive.
Also this week we reported Centuria was in negotiations for a Bunnings backed homemaker centre in Melbourne’s Chadstone.
Meanwhile, earlier this month, it seized control of a $444m agriculture fund from the Arrow Primary Infrastructure Fund.
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