Cbus Property hopes to reap $300m for an office building in Pirie St, Adelaide.
Superannuation fund-backed heavyweight Cbus Property is looking to cash in on the turnaround in the office market, offering up a premium Adelaide tower for about $300m.
The company has put 83 Pirie St, a 22-level A-Grade office tower in the heart of Adelaide’s CBD, on the market via RWC and CBRE amid a run of sales in the city.
A sale at this level would break records in the city, topping the $203m acquisition of an office tower by Mapletree from Dexus in 2017.
The 30,000sq m building sports large flexible floor plates of 1750 sqm and has a wellness centre, luxury end-of-trip facilities, a business lounge, and a rooftop terrace with views of the Adelaide Hills.
It is Adelaide’s first all-electric, carbon-neutral-ready building and the first commercial and retail mixed-use building that will not use natural gas.
Cbus Property confirmed it was divesting the Pirie St complex with a spokeswoman saying it was “part of its established counter-cyclical investment strategy”. The fund pointed to its sales, over different market cycles, of assets including CBW – 550 Bourke St and 181 William St – and 700 Bourke St in Melbourne and 1 Bligh Street in Sydney.
Adelaide offices have seen some action this year.
Fund manager Harmony Property pocketed a small profit on the $42.4m sale of a Hindmarsh Square office building, that houses Nova Entertainment. The fully-leased five-level building was acquired off market by local investor Panto Zecevich on a 6.25 per cent yield.
The deal came a little over five years after Harmony paid $40.5m for the six-level building.
That followed the heavily discounted sale of the former SA Department for Infrastructure and Transport headquarters on Grenfell St, which was secured by Melbourne-based LAS Group for $45.7m – less than half of the price vendors Wingate and IP Generation paid for the tower in 2018. LAS Group, headed up by Melbourne developer Les Smith, is considering a conversion of the vacant 20-level office tower at 77 Grenfell St into student accommodation or a co-living scheme.
Wingate and IP Generation will cop a hefty loss on the sale after paying $103.5m for the property in 2018, when it planned to invest in major upgrade works in a bid to retain the department as an anchor tenant.
However, the department’s move to Cbus Property’s development on Pirie St at the beginning of 2023 left the 16,000sq m building vacant.