Centuria Capital joint CEOs John McBain and Jason Huljich. Picture: Hollie Adams
Property funds manager Centuria is making a play for a 50 per cent stake in two office buildings in Sydney’s World Square precinct, in a deal worth about $450m.
The impending purchase comes as investors chase the upswing in the office market and bet that city buildings will fill up as tenants are left with fewer options.
The blocks are being sold off by Canadian giant Brookfield, which had earlier fielded interest from property funds house Investa, aided by investment bank Barrenjoey. The contest shows that more companies are willing to take a bullish approach on offices.
Investa, with the backing of US group BGO, is separately in talks to acquire a major building in North Sydney for about $600m. It is buying the NBN headquarters at 100 Mount Street, which is being sold off by Dexus and its main wholesale fund.
Centuria has been taking a more bullish approach by chasing assets including shopping centres and industrial parks. It last year sold offices in Sydney including in South Eveleigh and Chatswood, so the move on World Square signals it is now more upbeat.
Centuria is chasing Brookfield’s 50 per cent interest in two office buildings in Sydney’s World Square.
While the metrics on the transaction will probably show it as a counter-cyclical move as Sydney’s headline office vacancy rate remains high, it could be among the last of this type, as more “core” money is now chasing even larger deals.
After a period when few offices changed hands, fund managers are now leading the charge back into the market, betting on improved leasing conditions, tightening vacancies and the lack of new stock for tenants.
Savills’ Ben Schubert and Adrian Bokolis, and JLL’s Luke Billiau, Simon Storry and Kate Low marketed the building, but they and the parties declined to comment on the deal.
Brookfield put the half stake in the two office buildings at Sydney’s World Square complex on the block last year. The offer of the interest in 680 George Street and 50 Goulburn Street was tipped to appeal to counter-cyclical buyers and since then funds managers have been buying in eastern states capitals.
The buildings comprise 67,796sq m of space and are multi-tenanted, and they can be upgraded so they are carbon-neutral. The 36-storey complex was built in 2004 and renovated in 2024.
Centuria is targeting the George Street complex as it is rare A-grade accommodation in the heart of the World Square retail precinct, which has more than 100 retail outlets. Sydney CBD’s southern precinct is taking off, with notable tenants including Government Property NSW, TAB and WSP Australia.
The building is co-owned by the Australian Wholesale Property Fund, which was formerly the Allco Wholesale Property Fund. That vehicle is now effectively owned by large superannuation funds.