CBRE Global Investors Acquires Trophy Office Development in North Sydney
19 Nov 2019
CBRE Global Investors has acquired 118 Mount Street, a 21,012-square-meter trophy-quality office development in North Sydney, via a fund-through transaction on behalf of a German real estate Spezialfonds. The building is being developed by Zurich Insurance Group to house the headquarters of Zurich Financial Services Australia, which will occupy more than 64 percent of the building.
Located on the eastern side of the North Sydney precinct, the property is well-located adjacent to the motorway that runs over the Sydney Harbour Bridge and provides uninterrupted harbor and city views from the majority of levels. With completion expected in Q4 2020, it boasts three street frontages and will feature 817-square-meter floor plates, a lobby café, rooftop terrace and high-quality end-of-trip facilities. The building is also expected to feature high sustainability credentials, targeting a 5-Star NABERS Energy rating and 5-star Green Star rating.
“The North Sydney market is undergoing a revitalization with a significant infrastructure spend,” said Chris Johnston, Managing Director-Australia and New Zealand, CBRE Global Investors. “We are excited about how this market is evolving and the opportunity for our client to be part of that revitalization as the owner of a development of this size, quality and location.”
With close proximity to the Sydney CBD and an iconic location on the north side of Sydney Harbor, the North Sydney market has a solid base of existing tenants and continues to attract new tenants seeking to relocate from suburban locations. Additionally, construction of the new Victoria Cross Metro station and a new Metro rail link connecting North Sydney station to Barangaroo and Martin Place, due to complete in 2024, will greatly enhance North Sydney’s ability to attract top-tier tenants.
”Zurich Insurance Group has a systematic and structured investment approach,” said Reto Buehler, Zurich’s Head of Real Estate of Australia. “Our mission is to achieve superior risk-adjusted returns relative to the Group’s liabilities. With the sale and leaseback of 118 Mount Street, we have achieved important milestones as this property will provide our Australian business with new purpose-built headquarters and support the optimal diversification of our global real estate investment portfolio. Notwithstanding the sale, Australia will remain part of our global investment strategy.”
Cushman & Wakefield International Directors of Capital Markets Australia & New Zealand, Richard Butler and Mark Hansen, exclusively represented Zurich in the transaction.
“The sale of 118 Mount Street highlights the ongoing strength of institutional demand for assets in North Sydney, a precinct that continues to undergo a significant transformation,” Hansen said. “The North Sydney office market continues to be a destination of choice for global capital, having attracted more than $1 billion in investment in the past 12 months from Singapore, USA, United Kingdom, Hong Kong and Mainland China.”
“North Sydney is expected to outperform in the short term with occupier demand supported by attractive rents compared to the Sydney CBD,” Butler said. “Over the longer term, we expect North Sydney rental growth to accelerate and spreads relative to the CBD to contract.”
About CBRE Global Investors
CBRE Global Investors is a global real asset investment management firm with $106.2 billion in assets under management* as of September 30, 2019. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.
CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2018 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com.
*Assets under management (AUM) refers to the fair market value of real asset-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real asset-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real asset market, and its calculation of AUM may differ from the calculations of other asset managers.
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