Stockland has set its sights on the midtown precinct in Sydney’s CBD, acquiring the remaining 50 per cent stake in the Piccadilly Centre from Oxford Properties for $347 million.
The acquisition was confirmed by Stockland in its results, along with the divestment of 135 King Street and Glasshouse for $340 million.
The diversified developer exercised its pre-emptive right to bid on the remaining half of the Piccadilly Centre from Oxford—formerly Investa—taking its ownership of the $700 million centre to 100 per cent.
The ASX-listed group originally offloaded its half stake to Investa in 2014 for $194.25 million. Investa’s commercial property fund managed the 32-storey office tower while Stockland retained management of the two-storey retail asset facing Pitt Street.
The group’s commercial chief executive Louise Mason said that the asset swap has facilitated the full acquisition of the Piccadilly Centre and allows Stockland to progress its redevelopment plans with the City of Sydney.
The Piccadilly asset sits on a 4,800sq m block facing Pitt Street and Castlereagh Street and serves as Stockland’s headquarters.
Related: Stockland Accelerates Retail Retreat, ‘Cautious’ About Market Recovery
Hard hit by market headwinds in its retail and retirement village arms, the diversified developer has amped up its office outlook in line with its “logistics and workplace” strategy.
“The acquisition of the remaining stake in Piccadilly aligns with our accelerated workplace [strategy], which is focused on development opportunities that enhance long-term income growth and increase the valuation resilience of the overall portfolio,” Stockland managing director Mark Steinert said.
Lower valuations and the group’s exposure to retail caused a 70 per cent decline in its statutory net profit.
The group’s retail town centre division returned a poor result for the listed developer, with retail town centre devaluations totalling $474 million for the year.
