Centuria banks premium on south Sydney office

The South Eveleigh office was valued at $115 million in 2022.

Centuria has sold the second of three inner south city Sydney offices acquired eight years ago to seed the unlisted ATP (or Australian Technology Park) Fund.

The manager is turning another profit – 1 Central Avenue, South Eveleigh, is collecting $103 million, a significant gain on the $40m it paid.

Also known as the Biomed Building, developed in 1998 with 7705 square metres over five floors, the University of Sydney is the anchor – with 90 per cent.

It is 2.9pc vacant with a weighted average lease expiry of 6.6 years.

There are also 32 car parks.

Fall on 2022 book value

Two year old local investment house and developer Kurraba Group, representing a private investor, is buying 1 Central Ave.

Rebus Property’s Scott Timbrell, the agent, sealed the off-market deal at last year’s book value.

The result falls short of the June, 2022, appraisal however – $115m, which assumed a 4.88pc capitalisation rate.

Centuria outlaid $103m for the three ATP Fund assets (story continues below).

Last year it sold the smallest – the nearby historic Belltower – for $18.25m, substantially more than the $3.3m it outlaid before renovating.

The final property – also the largest and priciest – is the Data61 Building at 13 Garden Street, South Eveleigh.

Developed in 2010 on 1.72 hectares, with 11,206 sqm leased to, amongst others, the CSIRO, the Department of Defence and Seven, it was valued in reports mid-last year at $138m – a 5.5pc cap rate.

If sold at or above that amount, fund investors will have enjoyed a total return exceeding 300pc.

The average annual distribution yield has been a high 15pc, Centuria added.

“We acquired three South Eveleigh office buildings for the ATP Fund on the cusp of the area’s regeneration,” according to Jesse Curtis, Centuria’s head of Funds Management.

“As one of the first institutions to support the precinct, our investors have since benefitted from significant social and commercial infrastructure in the area,” he added.

“Its fringe market location has developed into a thriving hub for large and medium-sized businesses, providing easy commutability and lifestyle amenities,” he said.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.