Singapore group snares Parramatta’s Jessie Street Centre for huge price
Singaporean sovereign wealth fund GIC has extended its holdings in the western Sydney hub of Parramatta by snapping up the Jessie Street Centre, in league with property funds group Charter Hall, from Canadian group Brookfield for about $420 million.
The play puts on display the depth of capital for deals in the rising city and will boost GIC’s holdings in the area as it already has a half stake in Westfield Parramatta, where a major office tower has long been planned.
The deal will further align the Singaporean group and Charter Hall, which bought a half-stake in the $1.8 billion Chifley Tower and Plaza in the heart of Sydney from GIC.
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The pair are now working on masterplanning that site. Charter Hall picked up the freehold of Chifley last year and could extract further value from combining these interests and undertaking a precinct-style play. GIC is working closely with Charter Hall on its office portfolio and is likely to take a majority interest in the Parramatta tower. It has tapped Vicinity for a series of retail property transactions and is backing a major Dexus logistics fund.
Canada’s Brookfield put the Jessie Street Centre in the heart of Parramatta up for sale in April. Charter Hall already has several Parramatta towers in its workbook or under its control.
The transaction will show a yield of about 6% and comes as tycoon Lang Walker’s Parramatta Square precinct wins more tenants, underpinned by precommitments from the NSW government and NAB.
Other office players are active with GPT, Dexus, Mirvac, Australian Unity, Scentre and private interests proposing new towers.
The Jessie Street complex includes a four-level office podium with an expansive atrium and 15 upper levels of offices. Brookfield extensively refurbished it from 2007 to 2009 and the tower is occupied by government and legal tenants.
The 53,901sqm tower is on a 13,530sqm site that holds longer-term redevelopment potential. Brookfield tapped real estate brokers Paul Roberts, Ben Schubert and Graeme Russell of Knight Frank and Steven Kearney, Josh Cullen and Rick Butler of Cushman & Wakefield to advise on the sale but they did not comment.
The Singaporean sovereign wealth fund has been active. In August, it bought a stake of just over one-quarter in two massive Lendlease-developed towers in the Barangaroo South harbourside office precinct worth $4.6 billion in total.
GIC acquired a 25.1% stake in the Lendlease International Towers Sydney Trust — a $4.6 billion entity which owns two major Barangaroo office towers — from the Canada Pension Plan Investment Board and the listed Lendlease. GIC Real Estate chief investment officer Lee Kok Sun said at the time they were high-quality assets, in the heart of Sydney’s CBD, were “expected to generate attractive risk-adjusted returns in the long run”.
In Parramatta, the GIC and Westfield owner Scentre have plans for one of Sydney’s largest office towers on top of their shopping centre.
They want to develop a 42-level tower spanning about 112,000sqm of office space.
This article originally appeared on www.theaustralian.com.au/property.
