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Fortius in $70m CBD tower deal

Friday, October 02, 2015

Boutique investment house Fortius Funds Management has struck a deal to pay about $70 million for Bligh House office tower in the Sydney central business district. 


The building is being sold by Cromwell Property Group, which bought it in 2013 as part of a $400m portfolio acquired from the NSW government. 


The deal comes just a week after Fortius reaped more than $50m when it sold an office building in Bankstown to Singaporean private equity company SC Capital Partners. 


Fortius is also in talks with agencies about a potential sale of the $700m-plus MidCity retail complex and the office tower at Sydney's 420 George Street but agents are yet to be appointed. 


Fortius, Cromwell and agents on the Bligh House deal, Colliers International's Vince Kernahan and James Quigley and CBRE's Steven Kearney and Scott Gray-Spencer, could not be reached last night. 


Cromwell has been trying to sell the building, at 4-6 Blight Street, for about a year with a number of Asian parties showing interest. 


The tower is seen as a redevelopment play, although it is favoured to stay as an office building rather than being converted to apartments or a hotel. It is close to some of Sydney's best office buildings, including Chifley Tower, 1 Bligh Street and Investa Property Group's 126 Phillip Street. 


The 23-level tower, at the northern end of the CBD, was built in 1965 and has a net lettable area of close to 10,000sqm. It is mostly leased to the NSW government.


Cromwell has surprised the market by making the shortlist to purchase the $9 billion Investa Property Group Platform, with South Africa's Redefine International as its funding partner. 


But Chief executive Paul Weightman has also made it clear that the group would look to sell some of its properties to take advantage of the demand for commercial investments.


"If you're always buying, you're always missing out on half of that equation because you're never selling at the top. We are firm believers that you buy value and you sell when you can receive better than you think the (underlying) value is," he told The Australian last year. 


Cromwell is also looking to cash in on Brisbane's apartments apartment boom. The group has submitted plans to transform its long-held Terrace Office Park in Fortitude Valley into a major mixed use project with the building expected to be offered for sale later this month. 


Cromwell has proposed a development comprising two residential towers of 311 and 210 units as well as retail and commercial space.


Greg Brown and Ben Wilmont

The Australian

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