Australian Unity has sold a Parramatta office for $87.25 million – a 4.5 per cent premium on its December, 2021, book value.
The price for the eight storey asset, on 2017 square metres with significant development upside at 20 Smith Street, on the south east corner of George, also reflects a 4.6pc net passing yield.
It was one of 10 properties held by the Diversified Property Fund (ADPF).
Following settlement, the trust portfolio is worth $529m.
Colliers’ John McCann and Frank Oliveri with One Commercial’s Simon Kent and Joshua Charles were the marketing agents; the buyer is a private investor.
The sale comes five months since AU, on behalf of the Office Fund, offloaded another eight level Parramatta office, 32 Phillip St, for $66m, or a five pc rise on the June, 2021, valuation.
Renovated eight years ago, that price reflected a 5.7pc return.
20 Smith Street, Parramatta
The Smith St office contains 7352 sqm, last refurbished in 2018; with 11 tenants, including GHD, the Weighted Average Lease Expiry is 1.7 years.
A basement includes 182 car parks and end-of-trip facilities.
The asset carries a 4.5-star NABERS energy rating.
Its sale comes five months since ADPF offloaded a Rowville, Melbourne, industrial investment for $27.85m – a 26pc premium to the then-book value.
“Both sales demonstrate effective management of the portfolio and are in line with the fund’s stated repositioning strategy to recycle capital into significant development projects at neighbourhood shopping centres in Blackburn [North], and Busselton, Western Australia,” fund manager Jonathan Senior, said.
“The sale of 20 Smith St, Parramatta, increases the fund’s WALE to 8.4 years from 7.5yrs,” he added.
Elsewhere in the suburb, in January, Mintus outlaid $154m for an A-grade commercial building and neighbouring development site, permit-ready for another office, at 140-150 George St (story continues below).
Late last year, meanwhile, Gurner and Qualitas acquired a 2050 sqm plot, 12 Hassall St, with plans for a 62 Storey Build to Rent investment.
Also in 2021, the local council spent $64m on an office mooted to become a chamber following a redevelopment.
In retail circles, New Zealand based Cook Property Group recently offloaded Parramatta’s Entrada Shopping Centre for $41.45m – almost even with the price it paid in mid-2017.
Proceeds will be tipped into development pipeline: AU
The 50 year old Blackburn Square Shopping centre, in Blackburn North, is set to reopen next April; Schiavello is presently undertaking a $23m refurbishment which includes a Coles tenancy and food hall.
A second stage will add an Aldi supermarket, 102-place childcare complex, medical centre, gym and about 33 specialty stores.
AU said about 63pc of the development is pre-committed.
Meanwhile in Western Australia, the manager is intending to begin stage three of its Busselton Central Shopping Centre upgrade.
This project will add 6180 sqm of ground floor space, including retail and a food and beverage area with a tavern; Asian Kitchen, Benesse, Cotton On Mega, Dome and Funkee Monkey Bar & Eatery have signed up.
A five screen cinema to be operated by Readings is also planned, on level one.
ADPF owns three other assets in the state, all in Perth, including an IGA backed distribution centre, and the Dog Swamp and Woodvale Boulevard shopping centres.
Following the Parramatta sale, it will also retain a trio of New South Wales properties – including a Williamtown aerospace centre, majority rented to Boeing Defence Australia, for which it paid $55m last year.
The trust’s final asset, the Osborne Centre of Defence, near Adelaide, cost the manager $48.25m in late 2020.
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