GPT Group snares Parramatta Salvos site
GPT Group has signalled its determination to get back into office development by swooping on a $30 million-plus site in Parramatta being sold by the Salvation Army.
A purchase would give GPT Group control of a key property in Parramatta where developer Lang Walker and landlords including Dexus Property Group and Eureka Funds Management have been active.
The Salvation Army put its Parramatta office and church hall on the block last year as its long held site can sustain either a hotel or serviced apartment project or an office tower.
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GPT will buy three buildings, on the corner of 93-95 Phillip St and 32 Smith St, that are in a prime area for redevelopment. The site could sustain a 28,037sqm project and GPT would likely seek to win a tenant precommitment before kicking off its work.
The sites attracted strong interest from office developers and groups interested in mixed use sites.
JLL’s John Macree and Michael Binskin marketed the site with Raine & Horne’s John Surian. The agents and parties declined to comment.
GPT has struck a series of office deals in recent months which aim to capitalise on its development and leasing savvy, which chief executive Bob Johnston has sought to emphasise.
The three Parramatta buildings are considered prime for redevelopment.
The GPT Wholesale Office Fund last year boosted its stake in Brisbane office tower One One One Eagle Street that GPT developed.
The GPT-run fund also purchased Melbourne’s landmark gothic-style tower from ANZ for $274.5 million and will look to release the tower as the bank is preparing to move to a new complex in the city’s Docklands.
While the deal with the Salvation Army is yet to be completed, it is part of the group’s renewed focus on developing product at this heightened phase of the property cycle.
Some analysts have raised concerns about GPT’s elevated share price and Goldman Sachs on Wednesday downgraded GPT to sell from neutral. “While we acknowledge GPT’s high-quality diversified portfolio and solid balance sheet, we believe it is fully priced,” Goldman Sachs says.
The analyst says that to become more positive on GPT it would need to see better-than-expected office demand and an improved retail sales environment.
“We would also look for above expectation development outcomes on management’s identified pipeline,” Goldman Sachs says.
Catalysts could include the three sites which GPT has identified as delivering upside — Camellia, near Parramatta, parcels at Sydney Olympic Park and surplus land around Rouse Hill in Sydney.
This article originally appeared on www.theaustralian.com.au/property.
