Real estate investor and manager, Cromwell Property Group (ASX:CMW)(Cromwell), has today sold a 50% stake in 475 Victoria Avenue, Chatswood, for A$120 million, and entered into a joint venture for its expansion with a private fund managed by BlackRock.
Situated in the heart of the booming Chatswood precinct, 475 Victoria Avenue comprises two 13-level office buildings, ground floor retail and three levels of basement parking. Vacancy levels in Chatswood currently sit a 3.7%1, as companies increasingly look outside the Sydney CBD for quality office space.
The sale represents another practical example of Cromwell’s ‘Invest to Manage’ strategy, which involves investing capital to acquire or develop assets, creating new funds, selling down and then recycling the released capital into new opportunities.
Cromwell’s Chief Investment Officer, Rob Percy said: “Similar to the strategic approach taken with Northpoint Tower in North Sydney, the location, high-calibre tenants and considerable development upside of 475 Victoria Avenue position it as an attractive investment proposition.”
“In line with our value-add capabilities, Cromwell has an existing DA on the site for a new office building, hotel and additional amenity.”
“In partnership with BlackRock, we will review these plans and explore ways to further increase the value of the asset and support the continued growth of the Chatswood precinct,” Mr Percy said.
Hamish MacDonald, Head of Investments for BlackRock APAC Real Estate, said, “We are pleased to be leveraging our extensive experience investing in Sydney’s North Shore office market and partnering with Cromwell on this exciting off-market opportunity.”
“Local infrastructure investment, including the new Sydney Metro line connecting Chatswood with Sydney CBD, is facilitating positive market transition. A highly liquid and transparent market, coupled with population-led demand and yield spread to borrowing costs, makes Australia an attractive market where BlackRock Real Estate will continue to invest in on behalf of our long-term investors.”
“We look forward to adding value to this project and driving demand from quality office occupiers, as well as expanding our relationship with Cromwell on future opportunities,” added Mr MacDonald.
475 Victoria Avenue has secured major tenants including Leighton Contractors and Reed Elsevier Australia, who recently renewed 4,580 sqm across five levels for a further five years.
The transaction is subject to FIRB approval and is expected to settle in May.