Charter Hall sells North Sydney office for $212m

A Google Street View image of 65 Berry Street (left) and North Sydney’s tallest office (right), then under construction, at 1 Denison St.

Charter Hall has sold a North Sydney office after a direct offer from local fund manager Intera Group.

The $212 million price for 65 Berry Street reflects a 10 per cent rise on the June 30, 2020, valuation, and 5.21pc passing yield.

Adjacent to the proposed Victoria Cross Metro station, the property has development upside, containing a 34 year old building with a low (2.2 year) Weighted Average Lease Expiry surrounded by taller skyscrapers (including the suburb’s highest of 37 levels recently completed at 1 Denison St).

The entrance foyer at 65 Berry Street, North Sydney, was refurbished in 2017.

Charter Hall Office Trust (CHOT) has held 65 Berry St since the privatisation of the Charter Hall Office REIT in 2012.

Previously the asset was owned by Perron Investments and known as The Denison.

Cushman & Wakefield’s Josh Cullen, Mark Hansen and Steve Kearney introduced the purchaser.

The transaction was mooted by The Australian last month.

Approached by purchaser: vendor

The 65 Berry St office rises 17 floors, contains 262 car parks and 14,500 square metres of A-grade space, 1.4pc of which is vacant (story continues below).

WPP rents 71pc on a lease expiring in 2023 with no option.

“We were approached by the purchaser…off market, and given CHOT’s focus on major CBD markets, we chose to divest,” the landlord’s fund manager, Trent James, said.

Charter Hall Office chief executive officer Carmel Hourigan added “its pleasing to see a high volume of office sales printing at premiums to 30 June valuations, vindicating our view that asset pricing will be resilient”.

“In an environment of low interest rates, real estate will continue to be an asset class that is well supported into 2021 particularly as our tenant customer office utilisation rates improve nationally”.

Two weeks ago we reported Property Bank Australia sold a nearby seven level office at 53 Berry St, on the south west side of Miller St, for $54m.

Coincidentally that asset was controlled by Charter Hall too – until 2013.

Also last month Hong Kong’s Huge Linkage paid Dexus $273m for 60 Miller St in the suburb – a deal which needs Foreign Investment Review Board approval.

That property, with a 17-storey, 19,350 sqm building developed in 1987, and also a short (3.5 year) WALE, is 350m south of 65 Berry St.

The 34 year old office at 65 Berry Street, North Sydney.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of