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Stockland group and Oxford properties are trading places following a process to sell Oxfords' interests in 133 Castlereagh Street and 135 King Street Sydney.
The deal will see Stockland take up the remaining 50% interest in the Piccadilly Center and 133 Castlereagh Street for $347m whilst offloading the 50% interest it holds in 135 King Street for $340m to the unlisted Investa Commercial Property Fund’s (ICPF). It’s understood the deal was struck on a yield of about 4.1 per cent.
Stockland had acquired the 50% interest in 135 King Street in 2003 for approx $130m. The 25-storey A-grade office tower on King Street included the three-level Glasshouse mall fronting Pitt Street which has always had a difficult trading position due to the limit floor space. In 2014, the co-owners spent $30m converting the space into a single 3 level tenancy for H&M.
According to Stockland's Head of Commercial Property, Louise Mason, "the midtown precinct is undergoing significant renewal, which combined with our development plans will help further drive tenant demand and rental strength at Piccadilly’’.
Piccadilly Centre sits on a 4800sq m block with dual street frontages to Pitt and Castlereagh streets and could accommodate a larger office and retail building, however the precinct is increasingly becoming a residential area with plans for residential and hotel towers surrounding the site.
The Sydney Tatersalls Club adjoings the Piccadilly Centre where plans for a new 49-storey tower front Pitt Street have been lodged. The proposal includes a boutique 100-room, four-star hotel and a 246-residential apartment tower. Whilst Scentre Group and Cbus Property have plans to redevelop the nearby David Jones Market Street store into an upmarket retail complex with apartments above it.
Stockland also have to contend with the Wesley Mission who control a large part of the existing Piccadilly site with an 800 seat auditorium.
Cushman & Wakefield handled the transactions for Oxford and Knight Frank were engaged by Stockland.