Sussex Street office sale yields 6% annual growth

Standards Australia has sold its Sussex Street, Sydney office block for $32.5 million.

The 12-storey B-grade building, on the corner of Bathurst Street, was last traded at $15.25 million in 1999 – reflecting a 6.2% annual capital appreciation. The sale shows a passing yield of 9.5%.
The block was bought by Queensland’s Cornerstone Properties, which is backed by Brisbane’s Pidgeon family.

It has eight levels of offices, plus four levels of parking with a net lettable area of 6151 square metres.

Tenant SAI Global, which bought Standards Australia’s commercial businesses in 2003, and the University of Newcastle occupy most of the office space on leases that expire in 2014 with options for renewal.

Standards Australia, an independent, not-for-profit organisation recognised by the Australian government as the peak non-government standards body in Australia, moved its headquarters to the Exhange Centre in Bridge Street in 2007.

Standards Australia, originally called the Australian Commonwealth Engineering Standards Association, was founded in 1922.

Its 2009-2010 annual report valued the Sussex Street building at $32 million, amid its $178 million investment portfolio, which now has no direct property holding.

Since the building’s listing last September, marketing agents Ian Triganza and James Aroney at Jones Lang LaSalle had suggested it had residential conversion potential.

Jones Lang LaSalle noted Sydney's central business district western corridor had accounted for 62% of the total stock increase in the Sydney city centre during the past 10 years.

Colliers International had sought to secure $40 million in late 2008 for the office block.

Cornerstone owns five industrial Brisbane properties, which were bought between 2005 and 2007 at an $18 million cost.