The sale of the JPMorgan-occupied tower above Westfield Sydney has been paused.
US private equity giant Blackstone has paused its efforts to sell the JPMorgan headquarters in the heart of the Sydney CBD after it went on the market in August with an $850m price tag.
The firm has made the move after advice from real estate agencies Cushman & Wakefield and JLL during the campaign that interest had been tempered by global instability, including surging bond markets.
While sentiment is against the offer at the moment, Sydney is still attracting capital, with a series of smaller towers in the city and suburbs winning buyers.
The tower at 85 Castlereagh Street is also a rare full interest in a premium grade office tower in the Sydney CBD, unencumbered by the investment management agreements or pre-emptive rights, which affect most towers.
It also sits directly atop Westfield Sydney – with the retail centre itself attracting investment from super fund ART last year – and it has benefited from improvements to the precinct.
Anchored by a new lease to the investment bank, the asset has secure income with a weighted average lease expiry of 6.2 years, along with embedded growth via average fixed annual escalations of 3.75 per cent.
Sydney’s Midtown precinct, where the building sits, is also showing strong space absorption, with rental growth topping 10 per cent year-on-year.
Blackstone has been a seller of major offices, and last year sold its largest remaining office holding in Australia, offloading a 75 per cent stake in another Sydney landmark office building, Grosvenor Place, to CSC and GPT, in $1.35bn deal.
Blackstone last tried to sell the Castlereagh Street tower in 2023 after JPMorgan re-signed a 10-year lease. The US private equity group bought the three office towers above and around Westfield Sydney from the listed Scentre in 2019 for about $1.52bn.
It later onsold the building at 100 Market Street to Link REIT, with the Hong Kong-based group since selling a 50 per cent stake in that tower to super fund Aware. It also sold a smaller building to Abacus. The Castlereagh Street skyscraper was finished in 2011 and other tenants of the 32-level tower include Russell Investments, Scentre Group and Kroll.
The vendor and agents declined to comment.