Centuria Acquires 50% Stake in Sydney's World Square Office Towers from Brookfield for A$454 Million

Centuria (ASX: CNI) has exchanged sales contracts to acquire a 50% interest in two A-grade office buildings located at 680 George Street and 50 Goulburn Street in Sydney's CBD for A$454 million, the company announced. The stake is being acquired from a fund managed by Brookfield Properties, with the remaining 50% interest held by a domestic real estate investment management group.

The transaction is subject to conditions precedent, including approval from the Australian Competition and Consumer Commission (ACCC) and, if required, Foreign Investment Review Board (FIRB) approval. Settlement is anticipated in the first quarter of FY27, with an assumed settlement date of 1 September 2026.

Asset Profile: World Square Office Towers

The two buildings are integrated within the World Square mixed-use precinct in Sydney's Midtown submarket. Together, they provide 67,700 square metres of net lettable area across 45 levels of office space. Anchor tenants include NSW Government departments alongside national and multinational occupiers.

As of the anticipated settlement date, the assets carry a 93.4% occupancy rate by income — inclusive of leases under heads of agreement and a two-year rental guarantee covering remaining vacancy — and a weighted average lease expiry (WALE) of 4.0 years by income.

The buildings carry a 5-star NABERS energy rating, a 6-star NABERS waste rating, and a 4-star Green Star performance rating. End-of-trip facilities include 193 bike racks, 380 lockers, 33 showers, an upgraded wellness studio, and onsite parking for 348 vehicles across seven levels.

The World Square precinct sits on George Street with direct access to the light rail network and proximity to the Gadigal Sydney Metro Station, which has served approximately 15,700 passengers per day since opening in 2024, according to Sydney Metro. Town Hall and Museum train stations are also nearby.

Transaction Pricing and Fund Structure

Centuria said the acquisition was secured at a capitalisation rate of 7.5% and at approximately 60% below estimated replacement cost, based on assumptions in an independent valuation provided by Knight Frank dated 31 March 2026 as well as internal assumptions made by Centuria.

The transaction underpins the Centuria Sydney CBD Prime Office Fund (CSPOF), a single-asset unlisted fund described by Centuria as its largest of that type. The company is raising approximately A$268 million in equity from its investor network, including private capital and institutional investors. Centuria noted the offer has also attracted support from Japanese-based institutional investors. Minimum investment in the fund is A$100,000.

The fund carries an initial five-year term, with extension options as outlined in the Product Disclosure Statement. The initial forecast distribution yield is 7.50% per annum, paid monthly, covering the first two financial years from the assumed settlement date through 30 June 2028. Forecast distributions are anticipated to be 90% tax deferred in FY27. Centuria noted that forecast returns are predictive in nature and subject to assumptions, risks, and circumstances outside the fund's control, and that the firm does not guarantee fund performance, repayment of capital, or any income or capital return.

Executive Commentary

Jason Huljich, Centuria Joint CEO, said the firm is "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." He added that "new supply is structurally constrained, while existing stock continues to be withdrawn or repositioned, reinforcing the medium-term outlook for prime assets."

Huljich also noted the deal within Centuria's broader acquisition trajectory, stating that the firm's two previous acquisitions totalled A$216 million and A$168 million respectively, and that Centuria intends "to continue to scale-up acquisition size to underpin Centuria's AUM growth."

Andrew Essey, Centuria Chief Investment Officer, pointed to market performance data in support of the acquisition rationale. "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, citing JLL Research 2026. He noted that the Midtown precinct specifically recorded approximately 33,000 square metres of net absorption in 2025, the strongest of all Sydney CBD precincts, according to JLL Research 2026, and described the area as "undergoing a renaissance, benefitting from improved connectivity via the new transport nodes."

Centuria's Office Portfolio

As part of a real estate portfolio exceeding A$20 billion, Centuria manages 63 office buildings valued at A$6 billion across Australia and New Zealand on behalf of listed and unlisted funds, as of 31 December 2025. Centuria describes the World Square acquisition as underpinning its largest single-asset unlisted fund to date.

Sources

Centuria Capital Group – Centuria progresses $454m World Square office acquisition