Centuria Capital Launches Sydney CBD Office Fund at 60% Below Replacement Cost
Centuria launches $454m Sydney CBD prime office fund at 60% below replacement cost
Centuria Capital Group (ASX: CNI) has exchanged contracts to acquire a 50% interest in A-grade Sydney CBD office assets for $454 million, housed within a newly established single-asset closed-end unlisted fund.
The standout feature is the entry price. According to a Knight Frank valuation dated 31 March 2026, combined with internal Centuria assumptions, the assets were acquired at approximately 60% below estimated replacement cost, meaning the building was secured for far less than it would cost to construct comparable stock today.
The acquisition will be held via the Centuria Sydney CBD Prime Office Fund (CSPOF), described by the company as its largest single-asset closed-end unlisted fund. The asset, located at 680 George Street and 50 Goulburn Street, sits within the World Square precinct in Sydney CBD’s Midtown.
Centuria is acquiring its 50% interest from a fund managed by Brookfield. The remaining 50% interest is held by a domestic real estate investment management group. Settlement is scheduled for Q1 FY27, subject to conditions.
The deal represents a strategic, opportunistic deployment into a repriced office market, continuing Centuria’s momentum towards progressively larger acquisitions as it scales its assets under management (AUM).
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The fund at a glance: key terms for investors
The Sydney CBD office fund carries an initial five-year term and is targeted at Centuria’s investor network, spanning private capital and institutional investors. Key terms are summarised below.
| Metric | Detail |
|---|---|
| Acquisition price (50% interest) | $454 million |
| Equity raise | Approximately $268 million |
| Initial forecast distribution yield | 7.50% p.a., paid monthly |
| Fund term | Initial five-year term |
| Minimum investment | $100,000 |
| WALE | 4.0 years (by income, as at 1 September 2026) |
| Occupancy | 93.4% (by income, as at 1 September 2026) |
| Settlement | Q1 FY27 |
The initial forecast distribution yield of 7.50% p.a. applies to the first two financial years from the assumed settlement date and is presented on a pre-tax basis. Centuria notes the forecast is predictive in nature and does not guarantee the performance of the fund or any income return.
The WALE (Weighted Average Lease Expiry, the average time remaining across all tenant leases) and occupancy figures both include leases under heads of agreement and a two-year rental guarantee applied across the remaining vacancy.
Inside the asset: a prime-grade tower in revitalised Midtown
The acquisition covers a 67,700sqm, 45-level Prime-Grade office tower, positioned within a major mixed-use destination offering connected transport and retail amenity.
The building carries the following tenant and sustainability credentials:
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Diversified tenant mix comprising predominantly government, national and multinational occupiers
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5-star NABERS Energy, 6-star NABERS Waste and 4-star Green Star ratings
A key location catalyst has been the opening of the Gadigal – Sydney Metro Station, which Centuria cites as an important driver of Midtown’s revitalisation. According to Sydney Metro, the station has served around 15,700 passengers a day since opening in 2024, reinforcing the precinct’s connectivity within the World Square mixed-use destination.
Why a repriced office market matters
For investors less familiar with commercial property cycles, several terms in this transaction warrant explanation.
Acquiring an asset below replacement cost means buying an existing building for significantly less than the cost of constructing an equivalent one from scratch. This can create a margin of safety, since the purchase price sits beneath the underlying cost to replicate the asset.
Centuria has also pointed to structurally constrained supply. New office construction remains limited, while existing stock continues to be withdrawn from the market or repositioned. The company argues this dynamic reinforces the medium-term outlook for prime assets.
A closed-end unlisted fund of this type, offering a monthly distribution and a $100,000 minimum entry, is typically structured to appeal to private capital and institutions seeking income exposure. The timing and pricing of this deal are central to how the company frames the transaction’s value for CNI’s investment case.
Strong investor demand and management’s growth strategy
The fund was offered to Centuria’s investor network, including private capital and institutions, with an equity raise of approximately $268 million. In addition to the domestic base, Centuria reported that the offer was well supported by Japanese-based institutional investors.
Management has positioned the acquisition within a broader AUM growth strategy. It represents the latest in a series of increasingly larger property purchases, with the two previous acquisitions totalling $216 million and $168 million respectively. Centuria reported total AUM of $21.8 billion as at 31 December 2025.
The Chadstone Homemaker Centre acquisition, completed at $86 million with a Bunnings tenancy secured through 2030, illustrates how Centuria has been progressing through successively larger and more complex property transactions ahead of this Sydney CBD deal.
Jason Huljich, Centuria Joint CEO
“We are 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. New supply is structurally constrained, while existing stock continues to be withdrawn or repositioned, reinforcing the medium-term outlook for prime assets.”
“The Fund provides a rare opportunity for everyday Australian investors to share direct ownership in a high-quality Sydney CBD building with a strong and diverse tenant profile, embedded rental growth and reversion potential. This purchase is the latest in a series of increasingly larger property acquisitions we have made, our two previous acquisitions totalling $216 million and $168 million, respectively, and our intention is to continue to scale-up acquisition size to underpin Centuria’s AUM growth.”
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What’s next: timeline and conditions
Settlement is scheduled for Q1 FY27. The acquisition remains subject to conditions precedent, including ACCC approval, and FIRB approval if required, meaning completion is not yet certain.
A Product Disclosure Statement (PDS) and Information Memorandum (IM) for the fund are available from Centuria’s website for investors considering the opportunity.
The transaction reflects management’s stated intention to continue scaling acquisition size, a strategy designed to underpin Centuria’s broader assets under management growth ambitions across its listed and unlisted real estate platforms.
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