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Kara Capital advised Japanese corporate investors on the acquisition of a 50 percent stake in the World Square office complex at 680 George Street and 50 Goulburn Street in Sydney, the firm said in a statement. The deal prices the asset at a 7.5 percent capitalisation rate and a 60 percent discount to replacement cost for the 67,700 square metre net lettable area property that is 93.4 percent occupied. Major tenants include New South Wales government agencies along with national and multinational businesses while the remaining half interest continues to be held by an Australian real estate investment manager. The transaction will form the cornerstone of the newly established Centuria Sydney CBD Prime Office Fund, which Centuria Capital described as the largest single-asset unlisted property fund it has launched.
Centuria Capital will raise around $268 million in equity from private investors and institutions to complete the purchase, with Japanese institutional investors among those participating, according to The Urban Developer. The manager is targeting an initial annual distribution yield of 7.5 percent over a five-year term with settlement expected in the first quarter of the 2027 financial year. Joint chief executive Jason Huljich said the group was deliberately investing counter-cyclically into the office market. “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,” Huljich said.
Chief investment officer Andrew Essey told The Urban Developer that the Sydney CBD had recorded Australia’s strongest office absorption over the past two years with the Midtown precinct outperforming every other CBD area. “The Sydney CBD office market continues to outperform wider national office markets as it’s exposed to Australia’s largest white-collar workforce, leading to the strongest net absorption across all major Australian cities in 2024 and 2025,” Essey said. World Square, completed in 2004, transformed a former industrial precinct into one of Sydney CBD’s largest mixed-use developments and benefits from infrastructure including the Sydney Metro and light rail connections.
The acquisition follows Brookfield placing its half-stake on the market earlier this year, after which Centuria entered exclusive negotiations before launching the dedicated investment fund in May, The Urban Developer reported. Kara Capital leads Japanese consortium into $454 World Square Office Acquisition by focusing on building long-term relationships and educating investors about Australian real estate opportunities, the Singapore-based advisory firm stated. This approach has helped channel Japanese corporate capital into the deal at a time when Sydney prime office assets have stabilised following post-pandemic repricing.
Industry analysis shows Japanese investors have maintained strong appetite for Australian commercial property with several significant transactions completed in logistics and office sectors over the past 18 months, according to industry trackers. The Centuria fund offers everyday Australian investors the chance to gain direct exposure to a high-quality Sydney CBD asset with embedded rental growth and reversionary potential through its diverse tenant base. Centuria believes constrained new supply and improving tenant demand will support the market, particularly in the Midtown area around the Gadigal Metro station.
The transaction underscores the role of specialist cross-border advisors in matching Asian capital with Australian opportunities amid a period of market dislocation that has widened yield spreads relative to replacement costs. Public Authority data and real estate consultancy reports have highlighted sustained foreign investment inflows into Australian commercial real estate despite global economic uncertainties. Settlement of the World Square deal is anticipated to proceed as planned once equity raising targets are met.
