Australia’s Centennial Sells Sydney Office Building to Winten for $39M

Sydney fund manager Centennial Property Group has sold an eight-storey office building in the Harbour City’s North Shore area for A$54.5 million ($38.8 million).

The sale of 182 Blues Point Road in McMahons Point to Winten Property Group, the developer controlled by Sydney’s Rothwell family, comes after a 13-year carry in a single-asset fund that posted a 20.7 percent internal rate of return over its life, Centennial said Thursday in a release.

The building is fully leased to nine office and retail tenants across 4,328 square metres (46,586 square feet) of net lettable area, with a weighted average lease expiry of 3.3 years, according to Centennial. The firm founded by Jonathan Wolf and Lyle Hammerschlag acquired 182 Blues Point Road in 2012 for A$22.5 million, making it Centennial’s longest held asset.

“Back then we had four assets under our belt valued at A$41 million and a team of three, including Lyle and myself,” Wolf said. “Thirteen years later we have now grown to over 50 team members with offices in Sydney, Brisbane and Melbourne and we’ve acquired over 150 assets with funds under management at A$2.5 billion.”

Harbour Views

Occupying a 1,185 square metre site with three street frontages at the junction of Victoria Street and Blues Point Road, the building boasts Sydney Harbour views and blue-chip tenants including Getty Images, A2 Milk Company and civil engineering contractor Seymour Whyte.

The consideration for 182 Blues Point Road equates to A$12,592 ($8,958) per square metre of net lettable area. The transaction was brokered by Bevan Kenny and Chris Veitch of Stanton Hillier Parker.

David Cupit, Centennial’s fund management head, cited the asset’s premier location and strong retention rates and rental levels as attractive to investors and developers.

“While the One Eight Two Blues Point Road Unit Trust has been a stand-out fund over the years, it has reached its end of life and we’ve divested it at the right time in the property cycle where pricing and opportunity has aligned,” Cupit said.

Industrial Dealmaking

Centennial is parting with its office trophy after executing a series of industrial deals in the past 10 months.

Last April a KKR-backed Centennial fund sold Central West Distribution Centre, a logistics park in suburban Sydney, to Canada’s Manulife Investment Management for A$56 million, according to sources who spoke to Mingtiandi at the time.

Four months later, Centennial teamed with Hong Kong-based Phoenix Property Investors to acquire a site next to Brisbane Airport for development of a logistics park with an end value of A$240 million.

Earlier this month, Centennial wound up its A$780 million Enhanced Value Partnership fund after spending A$42.1 million on an industrial site with an operating warehouse in Sydney’s central west.

Winten Property Group, the buyer of 182 Blues Point Road, previously sold the Charles Sturt University campus in North Sydney to Singapore’s Keppel Ltd in a deal reported last September.

The Temasek-backed firm picked up the seven-storey office building near Victoria Cross rail station on behalf of the private Keppel Education Asset Fund I. Charles Sturt’s first metro campus adjoins another Winten renovation project, the 39-storey Berry Square office tower.