ESR sells Liverpool office for $52.5 million

The office (centre, with white roof) was constructed in 2000.

E-Shang Redwood Group (ESR Cayman Limited) has banked $52.5 million selling a four storey office leased to Centrelink in Sydney’s outer south west.

The sale price for 211 Northumberland Street, in the Liverpool CBD, reflects a 6.59 per cent return.

The site (highlighted) is about 27 kilometres south west of Sydney’s CBD.

It traded to a private Chinese investment group Stanley Xeu, previously known as Sit Shing Ho, after Colliers International’s John McCann, James Barber and Frank Oliveri with Ray White Commercial Peter Vines and Victor Sheu launched the marketing campaign, last October.

Some reporting agencies have the transaction as being struck last November – 38 days after listing.

One press release about the transaction was published in February, 2020 – pre the COVID-19 led economic slowdown.

Another media release was circulated yesterday.

About 27 kilometres from the city, the 7654 sqm Liverpool office was constructed 20 years ago and carries a 4-star NABERS rating.

Its weighted average lease expiry (WALE) is just over three years.

Hong Kong based ESR, which in Australia is selling down non core office assets to focus on logistics stock, picked the Liverpool investment up in 2016 – part of a $142 million play for a portfolio being offered by ASX-listed fund manager Propertylink.

The price attributed to 211 Northumberland Road was understood to be $35.76 million.

“Liverpool has seen strong demand over the past 12 months with the new airport in close proximity and the shortage of good quality investment stock, meaning 211 Northumberland Street was very well received by the market,” Mr McCann said.

“Because both campaigns were both highly anticipated, we see that demand for Liverpool will continue to increase (story continues below).

“Liverpool is becoming one of the most highly sought-after commercial precincts in Sydney and will greatly benefit from the Australian and NSW government 10-year, $3.6 billion road investment, delivering new and upgraded roads to support the Western Sydney Airport at Badgerys Creek.”

Early last year ESR sold an office in nearby Cambelltown for $19 million.

ESR spent 2H 2019 reweighting its property portfolio

ESR has been an active Australian buyer, seller and developer in recent times.

Last December it sold Mulgrave Business Park in Melbourne’s south east to Singapore’s The Straits Trading Company for $24 million.

ESR also created an office mandate – ESR Office Partnership IV (EOP IV) – with two wholly owned suburban Sydney assets worth a total of $138 million.

A month earlier it established a $350 logistics fund with China Merchant Capital Investment Co Ltd.

Last October the group sold another office park in Melbourne’s south east: 1-5 Lake Drive, Dingley Village, finding favour with diversified Sydney investor and developer HB+B Property for $19.75 million.

Also seven months ago, ESR offloaded an eight level unbuilt office at 1/254 Wellington Road, Mulgrave, to Ascendas REIT for $110.9 million.

This office will form part of a site for years owner occupied by Peters Ice Cream.

The Liverpool office includes 179 car parks.

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Marc Pallisco

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

Marc Pallisco