Sydney

CBRE Global Investors Acquires Trophy Office Development in North Sydney

19 Nov 2019

press-release

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.”

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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.

Forward-Looking Statements

Certain of the statements in this release regarding the planned acquisition of Laxfield Capital (“Laxfield”) that do not concern purely historical data are forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our management’s expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, but not limited to, our ability to successfully integrate Laxfield with CBRE Global Investors’ existing operations in the United Kingdom and to offer real estate investors an expanded investment offering in Europe, as well as other risks and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (SEC). Any forward-looking statements speak only as of the date of this release. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. For additional information concerning factors that may cause actual results to differ from those anticipated in the forward-looking statements and other risks and uncertainties to our business in general, please refer to our SEC filings, including our Form 10-K for the fiscal year ended December 31, 2018 and Form 10-Q for the quarter ended September 30, 2019. Such filings are available publicly and may be obtained from our website at www.cbre.com or upon request from the CBRE Investor Relations Department at [email protected]