OfficeLeon Della BoscaMon 12 Oct 26
Cbus Sells into Sydney’s Office Rally as Billions Shift to Retail Sector
Cbus Property has sold half of Sydney’s 5 Martin Place for almost $100 million more than it paid for the same stake two years ago.
The Mirvac Wholesale Office Fund (MWOF) has settled the $394-million purchase on a 5.75 per cent yield, valuing the 19-level, 33,860sq m tower at $788 million.
When Cbus paid $296.2 million in 2024 for the half held by Dexus and the Canada Pension Plan Investment Board, the deal reflected a 6.1 per cent yield and an implied total value of about $592 million.
Pricing on the tower has risen by about a third in roughly two years, with the yield firming by 35 basis points.
At about $23,300 per sq m of lettable area, the price is 20 per cent above recent Sydney CBD office sales at 135 King Street and 32-36 York Street, according to media analysis.
Ownership is now split equally, with Cbus retaining the other half of the building on the corner of Pitt Street.
Mirvac and Perron Group sold the former Reader’s Digest headquarters on 80 Bay Street, Ultimo, for an undisclosed price in July, about a decade after paying $22.7 million for it.
Melbourne’s office market is a different story. In July, Mirvac sold its 15-storey 380 St Kilda Road office building to OneEast Capital for $130 million, below the more than $163 million it was tipped to fetch when it was listed in December, 2025.
About 45 per cent of the building is vacant and Property Council of Australia figures for January put vacancy along St Kilda Road above 30 per cent.
MWOF exchanged contracts with Cbus Property in August to buy a half-stake in 171 Collins Street, Melbourne, home to BHP’s global headquarters.
Mirvac Group fund manager Kit Georgeos said the off-market acquisitions advanced the fund’s strategy of buying institutional-grade assets in Australia’s strongest office markets.
Capital raised by the fund during the past 12 months totalled $630 million, including $200 million recently secured from institutional investors.
Selling the stakes is also part of a broader rebalancing for Cbus Property, which manages 12 buildings valued at $4.5 billion on behalf of Cbus Super and has been diversifying away from office since the pandemic.
Cbus Property chief executive Chris Kakoufas said the sales were about “rebalancing our investments” and directing capital to the sectors with the greatest potential for long-term returns for members.
Retail has been on the radar, with Cbus Property buying half-shares in two regional shopping centres in Queensland and Western Australia from the Lendlease-managed Australian Prime Property Fund Retail for about $1.3 billion in August.
Even as it sells down office, Cbus Property is finishing its $1-billion, 48-level mixed-use tower at 435 Bourke Street, Melbourne, which topped out in April and is due for completion by the end of the year.
Designed by Bates Smart and built by Multiplex, the building would provide about 60,000sq m of office space and 1300sq m of retail.
Commonwealth Bank has committed to about 15,000sq m across levels one to eight.
Last month, Cbus Property also secured a ministerial permit for a $400-million project at 43 and 63-67 River Street, Richmond, comprising 200 homes across towers of nine and 12 storeys plus 13 townhouses.
