Centuria well in the black following fund sell down
Centuria has sold the third and final property from a fund set up nine years ago with offices in South Eveleigh, which it considered on the cusp of a revival.
The seven level Data61 building at 13 Garden Street is collecting $116 million.
It paid c$61m for the ATP Fund.
The buyers are Marprop Real Estate Investors with Gresham Property Funds Management on behalf of respective managed trusts.
The deal comes 15 months since Centuria sold 1 Central Avenue, also known as the BioMed Building, across the road, for $103m against a $40m purchase price.
The other asset – the Belltower, developed in 1887 as the Eveleigh Locomotive Workshop manager’s office, nowadays a childcare centre, at 6 Cornwallis St, Redfern, was shed for$18.25m in 2023.
Centuria outlaid $3.25m for this before undertaking a major renovation.
The pocket is about three kilometres south west of Sydney’s CBD.
Data61 at Eveleigh
Data61 occupies 3215 square metres also exposed to Central Ave, Locomotive St and Mitchell Way.
The seven level, 11,203 sqm office, developed in 2006, is fully leased to federal government backed research houses including the CSIRO.
Also with 63 car parks, it carries a 6-star NABERS score.
The weighted average lease expiry however is less impressive – 2.5 years by income.
The address is 250 metres from the recently opened Waterloo Metro station and Redfern’s Southern Concourse – the latter, the manager said, connected to six of Sydney’s eight heavy rail commuter lines.
Unitholders benefit from regeneration
Centuria ATP Fund unitholders will be delivered a 20 per cent internal rate of return.
The income yield has averaged 10pc.
“We are extremely pleased to deliver such a strong return for fund investors,” Centuria head of Funds Management, Jesse Curtis, said.
“Since 2016 the area has undergone significant regeneration and urbanisation, including improved transport infrastructure and connectivity, resulting in strong rental growth” he added.
“We believe this recent divestment signals a turning point in the metropolitan office market, and a resurgence in investor appetite for modern, sustainable properties,” according to the executive.
“This coupled with growing evidence of momentum in office-centric workforces led by government departments and large corporations, point to positive medium-term tailwinds.
“Furthermore, key economic drivers including population growth spurring white-collar employment and anticipated future office supply contracting as economic rents are expected to outstrip prevailing market rents, provide compelling fundamentals for office investment”.
Cushman Wakefield’s Steven Kearney, Jack Harrison and Kenny Duncanson with Knight Frank’s Jonathan Vaughan marketed 13 Garden St.
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