400 Kent Street is primarily leased to Central Queensland University
Credit Suisse Asset Management has sold a Sydney office tower to Hong Kong based family fund Longbow Enterprises for A$111.8 million ($80.64 million), according to sources familiar with the transaction who spoke with Mingtiandi.
The private equity fund manager’s sale of 400 Kent Street in Sydney’s central business district to Longbow, a privately owned asset management company controlled by the family of former Tysan Holdings chairman Francis Cheung Nim-chee, allowed Credit Suisse to reap double the amount that it had paid to acquire the 11-storey building in 2014.
The acquisition was Longbow’s latest buy in Sydney’s commercial real estate market as Asian investors continue to play a growing role in international property deals.
Profiting From a Sydney Surge
Credit Suisse Asset Management had picked up the grade A building two blocks inland from the city’s Cockle Bay Wharf from a pair of Charter Hall funds four years ago for A$58 million, according to public records.
The 10,500 square metre (113,000 square foot) commercial building includes 420 square metres of ground-floor retail space, and had recently benefited from a major plant and machinery upgrade, after being subject to a major refurbishment in 2005.
The sale was brokered by Cushman & Wakefield at a yield of 4.5 percent, and has a 14.5-year weighted average lease expiry, according to an account in the Australian Financial Review. The principal tenant at 400 Kent Street, Central Queensland University has recently committed to a 14.7-year lease.
Former Tysan Boss Builds Up Aussie Holdings
Former Tysan boss Francis Cheung has been investing in Australia through Longbow
The Cheung family, who formerly controlled Tysan Holdings, a Hong Kong-listed developer active in mainland projects, have been making investments regionally in the years since selling their stake in the family enterprise to Blackstone in 2013.
The group has been building up its holdings in Australia, which include the purchase of the Octagon office tower in Sydney’s Parramatta for about A$83 million from Charter Hall’s PFA Diversified Property Trust and Westlawn Property Trust in 2014 and 171 Clarence Street from Abacus Property Group for A$37.9 million in 2013.
The company also has active investments in Mainland China and Hong Kong. Longbow director and chief operations officer Theo Cheung is active in Hong Kong’s startup scene and is a co-founder of shared office provider playground.work
Asian Investors Still Love Assets Down Under
The Australian commercial real estate market remains a key destination for Asian investors thanks to its robust economic fundamentals, solid population growth, high market transparency and broadly higher returns relative to comparable markets globally.
According to Cushman & Wakefield research, outbound investment volumes from Asia during the third quarter of this year were led by M&G Asia Fund’s purchase of Brisbane’s 80 Ann Street for A$418 million and Japanese real estate firm Daibiru Corporation’s purchase – together with TH Real Estate – of Sydney’s 275 George Street for A$240 million. In addition, Hong Kong’s KHI Holdings acquired 277 William Street, Melbourne, for A$93.9 million.
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