Scentre Group (ASX: SCG) announced the sale of its Sydney CBD office towers to Blackstone for $1.52B. The office towers, located at 100 Market St and 77 & 85 Castlereagh St in Sydney NSW have been sold to Blackstone under a 299-leasehold arrangement. The properties were last developed in 2011 with SCG stating they have delivered a 16%+ unlevered IRR for shareholders with approximately an extra $800M of value created. The key asset, 85 Castlereagh Street is anchored by banking giant JP Morgan.
The proceeds from the sale, in conjunction with SCG’s recent sale of 50% of Westfield Burwood, will be used to fund an $800M share buy-back as well as repay debt. SCG expects the sale to be dilutive prior to the share buyback, by approximately 0.4 cents per security.
In the past week, the listed A-REITs have also been active, with approximately $835M of new capital being raised, including:
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National Storage REIT (ASX: NSR) raising $170M;
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Centuria Industrial REIT (ASX: CIP) raising $70M;
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Growthpoint Properties (ASX: GOZ) raising $150M; and
- Cromwell Property Group (ASX: CMW) raising $375M.
The raisings have been part of a record period of equity raisings by A-REITs with close to $6.0B of equity raised over the past 12 months, as share prices have reached levels not seen since pre-GFC.