GPT, CSC Winners in $1.72bn Sydney Skyscraper Tussle

GPT Group and new partner super fund CSC have each taken a half-stake in a $1.72-billion office skyscraper in Sydney’s CBD.

The real estate investment trust and CSC, the national organisation that manages superannuation funds for government and defence force employees, have entered the partnership to scoop up Grosvenor Place at 225 George Street.

The deal means CSC has increased its stake in Grosvenor Place from 25 per cent to 50 per cent

Based on the agreed purchase price, the total value of Grosvenor Place was $1.72 billion, CSC said.

The 44-storey Grosvenor Place is a premium-grade office tower in the financial core of the CBD and has about 84,000sq m of net lettable area.

Completed in 1990, the building was designed by renowned architect Harry Seidler as two convex lenses. Seidler described it as “a camera on the view” of Sydney Harbour.

According to industry sources, GPT’s co-owner, US private equity firm Blackstone, had planned to divest its 75 per cent interest in the highrise to a consortium that included office funds house Investa. The latter had partnered with BGO from the US to put forward a bid in the region of $1.35 billion for the share.

▲ The tower under construction in the late 1980s.

GPT chief executive officer Russell Proutt said the partnership with CSC would support the expansion of GPT’s $15-billion portfolio of office assets.

“With office leasing fundamentals strengthening and long-term capital growth potential, this investment aligns with our strategy to co-invest with our partners and leverage our operational capabilities to deliver strong returns,” Proutt, who is also managing director, said.

CSC chief investment officer Alison Tarditi said the fund had first acquired a stake in Grosvenor Place in 2007.

“The decision to expand our ownership of Grosvenor Place reflects our views on the quality, location and potential of the asset; our demonstrated capacity to leverage potential in our direct investments via proactive management; and our assessment of the entry opportunity afforded by Sydney CBD office market dynamics,” she said.

This new office co-ownership partnership builds on GPT’s $2.7-billion relationship with CSC that includes premium office assets such as 101 Collins in Melbourne and QV1 in Perth.