Cadigal’s involvement with 72 Christie Street St Leonards began in early 2017 working with Anton Capital who were looking to buy the building. The leasing risk was significant given its sole occupier Ogilvy Australia were vacating the building (11,500sqm) and had a lease expiry 31st July 2017.
Anton Capital and Cadigal both agreed that the vacancy provided an opportunity and both felt the building was ready to be repositioned and would be well re received in a leasing market that was gaining momentum.
Cadigal prepared a leasing strategy report that covered all aspects of the leasing process as well as a focus on the costs associated with the leasing process. These assumptions helped Anton to form a value for the property and included input on the following:
- Capex provisions for building refurbishment
- Potential downtime
- Achievable net rents
- Tenant Incentives
- Marketing costs
- Depth of tenant market
- Income projections over a 12-18-month period
Anton Capital were successful in purchasing the building and as a team we immediately applied our strategy and the leasing campaign began. One of the biggest challenges early was to agree on the level of refurbishment ensuring any capital spent could provide a financial return reflective in the rent as well as ensuring upgrades could meet the needs of a major corporate.
Although the focus was to secure a single tenant the leasing strategy needed to be flexible with the ability to secure single floor tenants. The building lobby, café and ground floor space also had challengers given the nature of a whole building occupier.
We were always confident of the strong leasing conditions and the lack of large vacancies available across the greater North Shore market. MasterCard one of a series of major corporates on our target list, although their focus was on the Sydney CBD and North Sydney.
MasterCard had a number of property scenarios they were considering at the time that included separating their requirements into two locations. With the knowledge of Mastercard reviewing their property needs Marcus developed a strategy to present the building to them as a “Campus Style facility” providing the opportunity to accommodate all requirements under one roof. Whilst St Leonards was not initially on their radar, the concept of being able to have ownership over the asset and creating a technology Campus started to take shape.
Over a four-month period Marcus and the Anton Capital team provided MasterCard with a number of leasing scenarios. Given the size of this transaction MasterCard’s Global Real Estate team became heavily involved from Singapore and the US as well as MasterCard Australia. Cushman Wakefield played a valuable part acting for MasterCard and assisting in all approvals.
The transaction was secured in two stages the first deal singing in mid-August 2017 with a lease start date May 2018. The balance of the building 4,032sqm was signed off in February 2018. A 10-year term was achieved and all 153 car spaces were leased.
The value of this lease has created enormous upside for Anton in relation to the buildings valuation and downtime was limited to 10 months.
This has been one of the largest leases signed on the lower North Shore over 2017-2018 and a great case study demonstrating the ability of the Cadigal team to work with clients to achieve an optimum result.
Above all, we feel it highlights what can be achieved when the right people work together as a team, delivering the right level of experience and trust to a leasing project .
- Client Anton Capital
- Total Leased Area 12,000sqm
- Cadigal Agent Marcus Pratley
- Tenant MasterCard Australia