Asian investors on city match as new towers spring up

North Sydney skyline at dawn showing a building under construction.

North Sydney’s swelling development pipeline has drawn two fresh Asian groups into the market with one picking up a tower in Berry St for about $60m and another planning a major complex in nearby Mount St.

In the purchase, WA-based Property Bank Australia and Security Capital Corporation have sold off one of their final North Sydney holdings by offloading a new boutique office building on Berry St for about $60m.

The pair were among the best known investors in the area in the wake of the global financial crisis and have now all but exited as asset values surge. They bought the property at 51 Berry St in 2012 for $15.6m and sold off-market after the complex underwent a complete refurbishment, bringing it up to modern standards, with it now billed as creative office space with a focus on wellness.

The sale of the renewed boutique asset, spanning 3511sq m across six levels, will likely set new benchmarks for the area, but the vendor declined to comment on the sale details.

PBA also sold 53 Berry St through Knight Frank last year for $54m to the billionaire-backed Lederer Group. It bought that asset for $19m in 2013 from a Charter Hall fund.

Meanwhile, Asian-backed group Dynasty ABC Pty Ltd has become the latest company to join the area’s development rush with plans to knock over a Mount St tower and build a new 37-storey tower.

The building, which is opposite the recently completed Zurich Tower at 118 Mount St, will be on the site of the existing nine-level building which Dynasty ABC bought in late 2019 for $115m. There has been a run of deal-making as investors propose new towers that capitalise on the planned metro station with big players assembling sites.

Dynasty ABC grabbed the nine-storey office building at 107 Mount St, which was sold by Burcher Property, against stiff opposition. The 6675sq m building carried a relatively short lease term when it was acquired.

Investors are also snapping up mid-size buildings as the cost of purchasing city towers has soared out of reach for all but the largest institutions.

LaSalle Investment Management last year swooped on 201 Miller St in North Sydney, picking it up from the Dexus Office Partnership for a net $152.4m, via Knight Frank and CBRE.