Sydney offices changing hands at record rates
Prime Sydney office towers are changing hands at record rates and buildings are selling at prices well above those during the last property boom.
After a wave of deals by Hong Kong tycoons in the second half of last year, domestic groups are stepping up, prompting suggestions the current commercial property boom has further to run.
In the latest buy, property funds manager Arcadia paid $176 million for a half stake in a Goulburn St tower occupied by the Australian Taxation Office.
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The holding was sold by Credit Suisse’s asset management arm, which had picked up its half stake in 2007 from developer Brookfield in a deal valuing the entire complex at $235 million, well below the latest value of $352 million.
The deal means the superannuation funds behind the manager, believed to be heavyweights Sunsuper, Victoria’s investment house VFMC and the Commonwealth Superannuation Corporation, will now extend their hold over a sizeable city block.
They also own a half interest in the Ernst & Young Centre and 50 Goulburn St in the World Square office tower, alongside Brookfield, as well as a half stake in the retail complex, beside ISPT.
The deal is notable for its crisp yield of about 4.75%, below the level at which yields bottomed in the previous cycle.
But rents in the building are in the mid-$600-a-square-metre range, which allows for significant growth, and the ATO is seen as a long-term tenant.
The Goulburn St complex is leased until 2022. It won interest from other local groups, including superannuation fund-backed ISPT and listed giant Charter Hall, due to its prime CBD location and secure ATO tenancy.
The sale was managed by JLL’s Rob Sewell, Paul Noonan, Stuart McCann and Luke Prokuda and Knight Frank’s Ben Schubert, Paul Roberts and Neil Brookes.
This article originally appeared on www.theaustralian.com.au/property.
