A private fund managed by BlackRock has acquired a 50% stake in an office and retail asset in a northern Sydney suburb for A$120m (鈧�72m) from Cromwell Property Group.
Simultaneously, BlackRock has entered a joint venture with Cromwell to add more space to the 475 Victoria Avenue asset, including an office tower and further amenities which could cost A$85-A$90m.
Paul Weightman, Cromwell鈥檚 CEO, told 麻豆映画 Real Assets that Cromwell already had development approval for the site, to include a hotel.
Weightman said the plan would be 鈥渢weaked鈥�. He expected further feasibility to be completed, and work to start on the expansion within 12 months.
BlackRock is familiar with Chatswood, having earlier formed a joint venture with Centuria Group to buy Zenith Towers for $279m in 2016. The partners sold Zenith Towers to Starwood Capital last year for $438.2m.
Hamish MacDonald, head of investments for BlackRock APAC Real Estate, said the firm was pleased to partner with Cromwell, and to be able to leverage its 鈥渆xtensive experience鈥� investing in Sydney鈥檚 North Shore office market.
鈥淟ocal infrastructure investment, including the new Sydney Metro line connecting Chatswood with Sydney CBD, is facilitating positive market transition,鈥� he said.
Coupled with population-led demand and yield spread to borrowing costs, he said Australia was an attractive market for BlackRock Real Estate to continue to invest in on behalf of its long-term investors.
MacDonald signalled the possibility of expanding his firm鈥檚 relationship with Cromwell on future opportunities.
The Chatswood project is part of Cromwell鈥檚 A$1.2bn value-add development pipeline in Australia.
Weightman said the Cromwell group also had a very strong pipeline in Europe and planned to roll assets either into its Singapore-listed Cromwell European REIT or to seed new funds, possibly to be listed in Singapore.
