Parramatta’s KPMG building sold for $56m
Global fund manager BlackRock has joined the ranks of investors and developers with an exposure to Parramatta, swooping on a Phillip Street building for $56.63 million.
The company picked up the A-grade complex at 91 Phillip St from Capital Property Funds-run unlisted trust for a global separate managed account.
The tower, known as the KPMG building, sits in the heart of the Parramatta CBD, and last traded in 2015 for $30 million and was refurbished by the vendor to boost the space to capitalise on demand in the area. The property sits on a prominent corner site spanning 2193sqm, and has potential for redevelopment.
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Cushman & Wakefield’s Steven Kearney and Mark Hansen and Savills Australia’s Simon Fenn, Graeme Russell, Tim Grosmann and Ben Azar, brokered the sale.
BlackRock was drawn to the 6094sqm tower due to its prime location in Parramatta, with the multi-tenanted building generating an estimated net income of $2.9 million and the weighted average lease expiry of 2.5 years.
Anchored by KPMG, tents include workspace group Regus, Cunningham Lindsey and Knight Frank, with law firm Maurice Blackburn to move in from early next year.
“We look forward to adding value to this building and meeting the needs of current and future tenants, while continuing to seek similar compelling opportunities for our long-term investors in Australia, BlackRock head of Australia real estate, Hamish MacDonald, says. Capital Property Fund executive director Andrew Kerr said the fundamentals of the Parramatta market had never been stronger and development activity was “moving ahead apace”.
Notably, an adjoining commercial strata amalgamation at 37-39 Smith St, which spans 1385sq m and offers a potential gross floor area of 14,215sqm, is under contract to a hotel group.
The site is being sold to a national developer who will build a 14,000sq m hotel for an international hotel brand. Agents Gordon McFadyen and Dylan McEvoy of JLL declined to comment on the impending sale.
Cushman’s Kearney says there is ongoing investor demand for the Parramatta CBD office market from domestic and offshore capital. “Prime grade vacancy in Parramatta is currently zero, and total vacancy is 4.3%, making the Parramatta commercial office market the tightest in the country,” he says.
Parramatta has drawn a surge of major office projects, including Scentre Group’s 25-storey tower on the corner of Argyle and Church Streets, Coombes Property’s 50 Macquarie St, GPT Group’s 32 Smith St, the Dexus building at 140 George St and Walker Corporation’s 8 Parramatta Square.
Grosmann says the asset is ideally positioned to capitalise on the surrounding development and is more than likely to be redeveloped.
Capital Property Funds has separately acquired the 15-storey office tower at 110 Eagle St Brisbane this month for $32.25 million. The complex sits on an island site asset and has multiple value-add opportunities.
This article originally appeared on www.theaustralian.com.au/property.
