Stockland has bought the remaining 50 per cent in the Piccadilly Centre, Sydney.

Stockland in at Piccadilly, out of the Glasshouse

Michael Bleby and Ingrid Fuary-Wagner|Aug 22, 2019

Stockland has confirmed its much-anticipated acquisition of the remaining 50 per cent stake in Sydney’s Piccadilly Centre from Oxford Properties for $347 million while exiting its half stake in 135 King Street and Glasshouse nearby for $340 million.

The parallel deals allow Stockland to recycle capital into the heart of Sydney’s booming office market, with considerable redevelopment opportunity on the 4800-square-metre Piccadilly site.

“The midtown precinct is undergoing significant renewal, which combined with our development plans will help further drive tenant demand and rental strength at Piccadilly,” said commercial property head Louise Mason.

Stockland had a pre-emptive right to bid on the remaining half of Piccadilly which Oxford had put on the market as part of its extensive divestment of office towers from the holdings of the formerly listed Investa Office Fund which the Canadian group took over last year.

The sell-down was steered by Cushman & Wakefield’s Josh Cullen and Mark Hansen.

Meanwhile, a few blocks away Stockland itself has unloaded its stake in 135 King Street and the Glasshouse shopping centre where the unlisted Investa Commercial Property Fund’s (ICPF) took up its pre-emptive right over the asset. It’s understood the deal was struck on a yield of about 4.1 per cent.

The property, a prominent 25-storey A-grade office tower on King Street as well as the three-level Glasshouse shopping centre fronting Pitt Street Mall, had been co-owned by the two parties since ICPF bought a half stake in 2014 for $130 million on a yield of 7 per cent. Stockland acquired its 50 per cent share in 2003.

Stockland engaged Knight Frank’s Graeme Russell, Ben Schubert and Paul Roberts to sell the property off-market.

Businessman Victor Comino made an early bid for the asset but was knocked out of the running by the Investa fund. It’s understood the $17.5 billion funds management giant ISPT had also shown interest.