Sydney CBD office building listed with $220 million hopes

Sydney CBD office building listed with $220 million hopes
Sydney CBD office building listed with $220 million hopes

A leased office building with development potential in the Sydney CBD has been put up for sale by fund manager Centuria with price expectations of more than $220 million.

Centuria will be selling 100 per cent freehold interest in Swire House, 10 Spring Street, according to Savills, which is marketing the property along with INC Real Estate.

Recent stock withdrawals for residential conversion and the Sydney Metro has created  strong demand for B Grade office space in the Sydney CBD, while driving down yields, according to Savills.

The subsequent spike in rents, coupled with limited opportunities to purchase investments (particularly those with supersite development potential), has driven yields down as local private and institutional money and offshore capital try to secure assets to cash in on tenant demand.

The Spring Street building has 53 per cent of leases up for renewal in the next 24 months. 

The 13,871 sqm building sits on a site area of 1,505 sqm and has large, effective floor plates over 17 levels including retail, with floor to ceiling glass windows and harbour views from the upper floors.

It last changed hands for $91,638,000 in 2013, according to Corelogic RP Data.

The listing agents are Simon Fenn, Graeme Russell and Ben Azar of Savills Australia and Josh Cullen and Rick Butler of INC Real Estate.

Sydney CBD office building listed with 0 million hopes

The refurbished building offers a short Weighted Average Lease Expiry (WALE) and existing vacancy on the upper floors, allowing for positive reversion to be captured, said Simon Fenn of Savills. 

“This is the right asset for both local and global capital who will be attracted by the 100 per cent ownership, the immediate reversion potential and the opportunity to secure a large site with development potential in the core of the CBD” he said.

The property’s development upside is on an ‘as is’ basis as the current building is under the allowable FSR, with further upside of a ‘Super Site’ if a larger site can be amalgamated.

A potential supersite could be created by amalgamating adjoining assets. Depending on which sites are acquired a 300m height limit is possible with 80,000 sqm of NLA or a potential overall site area of 3,015 sqm. 

 

Tags: 
Sydney Cbd Office Sale

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