Raffles Education sells Parramatta office block for $80m
Singapore-listed company Raffles Education Corporation has struck a fresh deal to offload its Parramatta office block, as more than $1 billion worth of towers in the western Sydney hub are in play.
Raffles will exit Australia by selling 1-3 Fitzwilliam St to a trust run by private Asian company Wentruth for $80 million in yet another deal in which a first-time buyer has entered the country by purchasing in Parramatta.
Offshore capital is chasing more sites suited to medium-term investment and eventual development as the area is transformed by projects like tycoon Lang Walker’s $3.2 billion Parramatta Square.
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Raffles came close to selling the 9677sqm tower last year for $82 million to the then listed Propertylink, but that deal did not go ahead and the prospective buyer was then privatised.
Raffles is listed on the Singapore Exchange. It began with one college in 1990 and now runs more than 20 colleges and universities across the world. It will reap a substantial uplift on the sale as it picked up the building for $29 million in 2014.
The building, now occupied by an ECA and Swinburne University of Technology venture, and Parramatta council, is also benefiting from rising interest from education groups in the area with Western Sydney University and UNSW Sydney also developing an engineering innovation hub in the city.
Raffles sold the property via Cushman & Wakefield’s Steven Kearney and Mark Hansen and Colliers International’s John McCann on a yield of about 5%, reflecting the strength of tenants and the location.
Buyer interest in Parramatta is strong as tenants are re-signing in their buildings as vacancy is low, with the likes of Telstra, Parramatta council and Westpac all renewing in the area. The Department of Home Affairs also has a leasing requirement for about 14-16,000sqm in the market with Parramatta among the suburbs it has nominated to shift into.
The city’s southern gateway precinct is undergoing reform with a series of buildings changing hands.
A Valentine St tower owned by an Australian Unity-run trust is being taken over by Charter Hall and Abacus and could also sustain a new tower. A Centuria Capital-run fund is also selling 2 Wentworth St for about $95 million via Cushman and CI Australia.
The Raffles property sits next to Parramatta Transport Interchange, Parramatta Square and Westfield. It has unused floor space ratio, giving it potential as a development site.
At a similar pricing level a Chinese group bought the office block at 80 George Street Parramatta for about $82m. The vendor, Diamond Genest, had bought the complex in late 2016 for $51.9 million from a GDI-run fund,
At the bigger end, Singaporean sovereign wealth fund GIC this month picked up the Jessie Street Centre, in league with property funds group Charter Hall, from Canadian group Brookfield for about $420 million.
This article originally appeared on www.theaustralian.com.au/property.
