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After announcing plans to spend $1 billion on new assets in June, real estate investor and manager Cromwell Property Group (ASX:CMW) has today slated more than half that amount for buying 400 George Street in Brisbane.
The company has exchanged contracts to buy the property for $524.75 million, with funds to be used from the recent $300 million sale of its 50 per cent stake in Sydney's Northpoint Tower and an oversubscribed share purchase plan (SPP) that brought in an extra $407.5 million.
Located in the river city's North Quarter precinct close to the Kurilpa Bridge, 400 George includes tenants such as the Australian Competition and Consumer Commission (ACCC), Cooper Grace Ward Lawyers and Microsoft, as well as several State and Federal Government departments including the Fair Work Ombudsman.
The 35-level building was built in 2009 with a total net lettable area of 43,978 sqm spread across office, retail and childcare, and it has a 99.8 per cent occupancy rate.
Cromwell highlights Brisbane's commercial property market continues to improve with vacancy declining to 11.9 per cent.
"We continue to look to recycle capital from assets where we have already added significant value, as we have done with Northpoint Tower in North Sydney, to ones where we see new opportunities such as 400 George Street," says chief executive officer Paul Weightman.
He says proceeds from the recent Sydney property sale and the SPP will be used to continue to fund opportunities identified as part of Crown's 'Invest to Manage' strategy.
"Our focus on executing strategy and creating securityholder value will continue, and we have a number of other accretive opportunities in the pipeline," says Weightman.
The transaction is subject to Foreign Investment Review Board (FIRB) approval and is expected to settle next month
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