An eight storey office in central Parramatta has sold for just over twice the price it last traded for, in 2012.
A private investor is buying 16-18 Wentworth Street from Chandru Tolani and Sanjay Kumar’s Chandry Enterprises, for nearly $40 million.
The 6400 square metre asset was fully occupied eight years ago; today it is more than 50 per cent vacant.
Built in 1991, it occupies a 1333 sqm block.
Ray White Commercial Western Sydney’s Jai Sethi and Victor Sheu were the marketing agents.
The incoming owner, which the AFR is reporting as Stanley Xue, intends to reposition the asset and capitalise on rising demand for Parramatta commercial space.
Parramatta train station and Westfield Parramatta are in the immediate vicinity.
The asset has efficient floor-plates, and is close to public car parking and amenity, which the brokers said should attract an array of tenants particularly professional services and those in the education fields.
In February, Mr Xue paid ESR $52.5m for a four-level office at 211 Northumberland St, Liverpool – about 16 kilometres south of 16-18 Wentworth St.
Chandru Enterprises is a diversified investment house holding childcare centres, hotels, golf courses, land and offices.
Just the latest major Parramatta commercial deal
Parramatta is a major metropolitan commercial hub, about 25 kilometres west of the city, which has seen substantial office development and investment in recent years.
Lang Walker AO’s Parramatta Square, with an end value of $3.2 billion, will contain about 290,000 sqm of commercial area.
One tower, 6-8 Parramatta Square, is set to become Australia’s biggest office by area, with 120,000 sqm over 55 floors.
Last week we reported a retail component within that master-planned project would make way for a CicciaBella, to be operated by Maurice Terzini.
Seven months ago, Singapore’s SC Capital Partners paid Centuria Property Funds Limited $105.3m for a nine storey, 10,940 sqm office (pictured above, right) at 2-10 Wentworth St, Parramatta (story continues below).
Also in the suburb in the fourth quarter of 2019, Charter Hall’s Direct DFA Fund offloaded a seven level office at 9 Wentworth St for $64.25m – and spent $415m, with Singaporean wealth fund GIC, to buy the 15-floor, 53,900 sqm Jessie Street Centre from Canada’s Brookfield.
GPT, meanwhile, paid $75m for three George St commercial properties – a 2871 sqm area previously permitted to make way for a 28-level hotel.
Incorporating the c1841 Perth House, and a seven floor commercial building, that site is now earmarked for a c75,000 office.
The same landlord owns the Eclipse Tower at 60 Station St, Parramatta, after paying $277m in 2018.
Other major commercial real estate deals sealed two years ago in the pocket include Roxy Pacific Holdings and Tong Eng Group – both Singapore based – paying $40.8m for 33 Argyle St. BlackRock also spent $57m on 91 Phillip St.
Still significant funds looking for the right investment: agents
“Parramatta is absolutely thriving, with Parramatta Square coming on really well, and the recent announcement of Parramatta Metro as well as the light rail on its way,” the marketing agents said.
“There are always keen investors looking at getting into this market,” they added.
“This deal is a testament that there are still significant funds looking to be placed into the right investment vehicle, despite COVID-19 and the complexity that it has generated across different markets and industries,” Mr Sethi said.
“Despite negative speculation of COVID-19 slowing the market and the lending market being risk averse and tight, we have historically low interest rates and quality assets with potential upside either in immediate uplift or future redevelopment are extremely attractive.
“The Asian capital that’s locally based is still looking for an opportunity and office assets seem to be a secure stand-out for these buyers right now, it’s a good balance of controlled risk, as well as future opportunity to capitalise underlying value.
“Parramatta provides businesses and investors a strong alternate option to the traditional CBD, as well as North Sydney’s high prices.
“This has led to higher demand for commercial space in Parramatta particularly of good location,” the agent said.
GPT and SCentre are other developers constructing commercial real estate in the suburb, Mr Sethi said.