Major players buy into Parramatta office market
High-profile property companies, the Roberts family-backed RF CorVal and Melbourne-based Grocon, have struck fresh deals in the western Sydney hub of Parramatta where billions of new developments are in the pipeline.
The area’s rapid growth has already attracted tycoon Lang Walker, who is undertaking the $3.2 billion Parramatta Square precinct, and a host of other majors including Charter Hall, Dexus, Mirvac and GPT, as well as private players.
In a deal struck just before year end, Terraform Capital on behalf of Longbow Enterprises sold a part interest in 110 George St, Parramatta in an off-market transaction. The stake in the building, known as the Octagon, was snapped up by RF CorVal, which bought the stake for its new Value Active Fund 2.
While pricing was undisclosed, the entire complex is worth more than $150 million. The purchase will provide a longer-term development opportunity with holding income. Terraform and RF CorVal will jointly manage the property, with a repositioning likely in future.
The property in the centre of Parramatta is an A-grade office building and is effectively fully leased. It spans a net lettable area of 21,082sqm and 314 car bays.
The major tenants include the NSW government, Michael Page, and TAFE NSW, with most leases expiring in mid-2023.
The property is significantly underdeveloped, sitting on a significant 7097sqm site.
Developers are banking on the Parramatta market’s transformation continuing on the back of major infrastructure, education and health spending.
The area will be bolstered by projects including the Parramatta Light Rail, Metro West and the new Powerhouse Museum.
The deal was brokered by the Cushman & Wakefield team of Rick Butler, Steve Kearney and Mark Hansen.
Nearby, property scion Daniel Grollo is making a come-back in Parramatta after pulling out of the area more than a decade ago and settling a dispute over a Brisbane project. The company laid out about $75 million for a build-to-rent project site, potentially with the backing of Singaporean sovereign wealth fund GIC.
It picked up the holding on the corner of Macquarie and Charles Street from companies associated with Charlie Demian and it can accommodate about 380 units, making it one of the largest specialist towers nationally.
The move comes Grocon last month avoided two key subsidiaries going into liquidation last month as their creditors approved a $4 million deed of company arrangement from Grocon’s parent.
The Parramatta deal is but the latest element of the company’s push into the nascent build-to-rent sector and makes it ones of the leaders alongside listed company Mirvac.
Grocon already had the backing of Singapore’s GIC and has sites in Melbourne’s Southbank district and inner-city Richmond. It has separately gone into due diligence to buy a 1.5ha site in North Melbourne from the Nick Theodossi Prestige Cars dealership for about $135 million.
This article originally appeared on www.theaustralian.com.au/property.
