Australian Unity offloads Parramatta office for premium
Australian Unity is banking $66 million – a five per cent premium to the June, 2021 book value – for a Parramatta office.
The eight storey property, 32 Phillip Street, contains 101 car parks and 6759 square metres of B-grade area, all of which is tenanted to GE.
Based on the net passing income, the sale, understood to be to a local private investor familiar with the area, reflects a 5.7 per cent yield.
Neighbouring the Powerhouse museum, due to open in 2024, and near a proposed pedestrian thoroughfare connecting the pocket to the existing train station, Metro rail stop and Parramatta Square, the 1141 sqm site has significant mixed-use development upside.
Colliers’ John McCann and James Barber with Knight Frank’s Wally Scales and Graeme Russell represented AU which held the asset in its Office Fund (AOF).
“We took 32 Phillip St, Parramatta, to market with Knight Frank, throughout the campaign process the property was extremely well received by the market and on close of the EOI we received several offers,” Mr McCann said.
“The Parramatta CBD is still receiving very strong interest, but we have noticed a shift with COVID lockdowns, with the majority of the interested parties local operators and if they were overseas parties, they had a local contact.”
Mr Scales added “working closing with the top bidders we exchanged unconditionally with local investor LC Partners, they already own property in the Parramatta CBD and have identified the future value in the location with the Powerhouse museum currently under construction next to this attractive asset”.
AU added it intends to explore various capital management initiatives for AOF, including the potential for an on-market buyback and/or a special distribution.
“Initially, the proceeds from the sale will be used to reduce AOF’s borrowings and gearing,” it said.
The group will also advance with value-add initiatives to a nearby commercial asset, 10 Valentine Avenue, and in the Adelaide CBD, at 30 Pirie St (story continues below).
Settlement of the Phillip St property is scheduled next month.
Parramatta rising
The sale comes three weeks since we reported Gurner, backed by Qualitas, paid Jean Nassif’s Toplace nearly $70m for 12 Hassall St, which was offered permit-ready for a 61 level apartment building.
Part of that 2050 sqm block includes the ex-Parramatta Police Citizens Youth Club building.
In September, the City of Parramatta outlaid $64m for a six floor office abutting its Wentworth St car park to occupy, possibly after an extension.
That vendor, Mayrin, directed by William Wu, acquired the asset, 9 Wentworth St, from Charter Hall 22 months earlier.
Also three month ago, Scentre was granted permission to build a 47 storey apartment building at Westfield Parramatta.
More to come.
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