OfficeLindsay SaundersWed 01 Jul 26
Centuria Capital Exchanges on $454m Stake in Sydney’s World Square Office
Centuria Capital has exchanged contracts to acquire a 50 per cent interest in Sydney’s World Square office complex for $454 million.
The progress locks in one of the year’s biggest Sydney CBD office transactions as institutional investors continue to back a recovery in prime office assets.
The acquisition covers the A-grade office buildings at 680 George Street and 50 Goulburn Street and will underpin the newly established Centuria Sydney CBD Prime Office Fund, the largest single-asset unlisted property fund launched by the manager.
The interest is being acquired from a Brookfield-managed fund, while the remaining 50 per cent stake will continue to be held by an Australian real estate investment manager.
Centuria said it would raise about $268 million in equity from private investors and institutions to complete the acquisition, with Japanese institutional investors among those backing the fund.
The transaction prices the assets at around 60 per cent below estimated replacement cost and reflects a capitalisation rate of 7.5 per cent, highlighting how investors are seeking value following the repricing of Australia’s office sector.
Centuria joint chief executive Jason Huljich said the group was deliberately investing counter-cyclically into the office market.
“We are deploying capital into a repriced Australian office market, where dislocation has created a window to acquire an institutional-grade CBD asset significantly below replacement cost and at an attractive income yield,” Huljich said.
“The fund provides a ... opportunity for everyday Australian investors to share direct ownership in a high-quality Sydney CBD building with a strong and diverse tenant profile, embedded rental growth and reversion potential.”
The World Square office component comprises about 67,700sq m of net lettable area across the two buildings, with occupancy of 93.4 per cent and a weighted average lease expiry of four years. Major tenants include NSW Government agencies alongside national and multinational businesses.
Centuria believes Sydney’s prime office market is benefiting from constrained new supply, improving tenant demand and stronger leasing conditions, particularly in the Midtown precinct surrounding the Gadigal Metro station.
Chief investment officer Andrew Essey said the Sydney CBD had recorded Australia’s strongest office absorption over the past two years, with Midtown outperforming every other CBD precinct.
“The Sydney CBD office market continues to outperform wider national office markets as it’s exposed to Australia’s largest white-collar workforce, leading to the strongest net absorption across all major Australian cities in 2024 and 2025,” Essey said.
The fund is targeting an initial annual distribution yield of 7.5 per cent over a five-year term, with settlement expected during the first quarter of the 2027 financial year.
The exchange is the latest milestone in a transaction first announced earlier this year after Brookfield put its half stake in the landmark World Square offices to market.
Centuria entered exclusive negotiations before launching the investment fund in May. The contract exchange confirms the acquisition will proceed.
