Cromwell’s chief investment officer Rob Percy said it was a similar strategic approach the business had taken with Northpoint Tower in North Sydney.
“In line with our value-add capabilities, Cromwell has an existing development approval on the site for a new office building, hotel and additional amenity,” Mr Percy said.
“In partnership with BlackRock, we will review these plans and explore ways to further increase the value of the asset and support the continued growth of the Chatswood precinct.”
Hamish MacDonald, head of investments for BlackRock APAC Real Estate, said the deal would leverage the group’s extensive experience investing in Sydney’s North Shore office market and partnering with Cromwell on this off-market opportunity.
The deal comes as Cromwell reported a statutory profit of $227.3 million, up 59 per cent for the half year ending December 31.
The rise was boosted by higher rents, sale of the Northpoint Tower in North Sydney and recycled capital into 400 George Street, the LDK Healthcare joint venture and acquiring the third-party interests in the Cromwell Polish Retail Fund.
Operating profit, considered the more accurate measure of real estate investment trust earnings, was $134.1 million, being a 26 per cent increase from same time last year.
Cromwell chief executive Paul Weightman said in conjunction with other confidential projects, the group has a strong line of sight to at least $1.2 billion of development work either under way or likely to start within the next few years.
But he told investors “2020 will be a difficult year for the world economy as the knock-on effects of the coronavirus are fully felt”.
“In Australia, hit by bushfires, floods, reduced numbers of tourists and international students, and with a susceptibility to any downturn in the Chinese economy, forecasts are being lowered. Economic growth for 2020 is likely to be well below the previously forecast 2 per cent,”Mr Weightman said.
On the retirement of the chairman Geoff Levy, Cromwell has appointed Leon Blitz as the new independent non-executive chairman.
“Cromwell is undertaking a strategic review, in conjunction with its advisers, UBS and Goldman Sachs. The review will examine all aspects of the business, the current ‘invest to manage’ strategy and all possible options to maximise security-holder value,” Mr Weightman said.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.