Cromwell pours $300M from sale of Sydney tower into acquisition cash pool
Written on the 2 July 2019 by Paris Faint
Cromwell Property Group (ASX: CMW) has exchanged contracts to sell its 50 per cent stake in Sydney's Northpoint Tower to a Hong Kong-based company for $300 million.
The real estate manager will offload its remaining interest in Northpoint to Early Light International, which initially acquired 50 per cent of the asset from Redefine Properties in August 2018.
Cromwell says the sale of Northpoint, coupled with a recent successful $375 million capital raise and a three-year 225 million syndicated facility, will provide certainty of funding for the ambitious spending spree it announced last week.
The company plans to buy a whopping $1 billion worth of assets across Australia and Europe within the near future, and says it is already in advanced stages of negotiation for several transactions.
Chief investment officer Rob Percy says the Northpoint sale is evidence Cromwell is pouring capital into its 'Invest to Manage' strategy.
"We will continue to recycle capital which, in conjunction with the placement, will allow us to accelerate the execution of our Invest to Manage strategy," says Percy.
"Northpoint Tower is a great example of what we can achieve, identifying and realising the value in what was very much an unloved asset.
"We are delighted to have had the opportunity to partner with Early Light and know the asset is in good hands for the future."
Northpoint Tower is a 44-level mixed office and retail space which was originally constructed in 1977. Cromwell acquired its stake in the building in December 2013.
A two-year $130 million redevelopment of the building commenced in 2016 and included a lower-level revitalisation as well as the addition of a leisure precinct and rooftop bar.
CMW shares are set to open at $1.17. The time of writing is 9:57am AEST.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Paris Faint