City Tower fetches a record $80m

RHIANNON HOYLE, REAL ESTATE EDITOR

March 16, 2007 01:15am

Article from: The Advertiser

IN A huge coup for South Australia, City Central Tower 2 has been bought by overseas investors for about $80 million.

The sale is a record for the state in terms of rate per square metre. Equivalent to $6500 per square metre, the sale eclipsed the average rate of between $3500 and $4500.

The office building, under construction, was bought on Wednesday by SachsenFonds, a large German investment fund.

Developer Caversham's manager for investment, sales and leasing, Ben Yates, described the sale as "bloody good news for SA".

"The purchase was hotly contested and what the buyers have recognised is the stability of the state and the potential for economic growth," he said. "The rate per square metre is fantastic and surpassed the past record of about $4600-$4700 by a country mile."

City Central Tower 2 features about 12,378sq m of net lettable space, including 578sq m of high-profile retail space on the corner of King William and Waymouth streets in the city.

The project, on track to be completed by early next year, is underpinned by a 30 per cent pre-commitment to Ernst & Young.

Mr Yates said this, coupled with the success to date in leasing Tower 1, was an attraction for potential investors. While Tower 1 sold for $143 million, that only equated to about $4500 per square metre.

SachsenFonds entered the SA market last year, buying Flinders Link on Flinders St, city, for $156 million.

Managing director Klaus Schmidt said the fund looked for assets worldwide and had stringent criteria for selection.

"City Central Tower 2 represents a superb asset in our portfolio and we are extremely pleased to be able to make this investment in South Australia," he said.

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