Real estate investor and manager Cromwell Property Group (ASX:CMW) (Cromwell) has today exchanged contracts to sell its 50% interest in Northpoint Tower, for $300 million to Early Light International, who will acquire a full ownership interest in the building.
The Hong Kong-based Early Light, founded in 1972 by Dr Francis Choi, acquired a 50% stake in Northpoint from Redefine Properties in August 2018.
Cromwell’s sale of its remaining interest in Northpoint, alongside its recent successful $375 million institutional placement and new three-year €225 million syndicated facility will provide certainty of funding for over $1.0 billion of acquisition opportunities that are in either exclusive due diligence or advanced negotiations as well as over $1.0 billion of value-add development opportunities.
Cromwell’s Chief Investment Officer, Rob Percy, commented, “Cromwell continues to identify value-enhancing investment opportunities across both its Indirect and Direct Property Investment segment that will deliver medium-term growth in enterprise value and realise significant capital returns for securityholders.”
“We will continue to recycle capital which, in conjunction with the placement, will allow us to accelerate the execution of our ‘Invest to Manage’ strategy. Northpoint Tower is a great example of what we can achieve, identifying and realising value in what was very much an unloved asset.”
“We are delighted to have had the opportunity to partner with Early Light and know the asset is in good hands for the future,” Mr Percy concluded.
Northpoint comprises 44 levels of mixed office and retail tenancies. Originally constructed in 1977, Cromwell acquired its stake in the building for $139.35 million in December 2013. A Development Application was lodged in December 2014, with a $130 million redevelopment commencing in January 2016. The development reached practical completion on time and on budget in March 2018.
The redevelopment was designed to meet the retail, dining and leisure needs of the ever-growing professional population in North Sydney. The lower level of the revitalised precinct focuses on convenience retail while the upper level is dedicated to dining and leisure, inclusive of a rooftop bar.
An eight-storey, 187-room Vibe Hotel was also constructed, complete with conference facilities, as well as a rooftop pool and gym.
The sale is subject to FIRB approval and is expected to settle in mid-September 2019.