Third.i.Group and Phoenix Property Investors have sold an unbuilt North Sydney office to Lendlease, which has flipped it as a completed asset, to Keppel REIT.
The 10 storey complex covering 2-4 Blue Street and 1-5 William – all up 2309 square metres – is due for completion in 2023.
Lendlease offered it with a three year rental guarantee.
Singapore listed Keppel is paying $327.7 million, reflecting a 4.5 per cent yield.
Elsewhere in the area, Billbergia recently announced plans for a 50 floor mixed-use tower, the upper half which will be configured as offices.
Stockland is also behind a 53 level proposal, unveiled in January.
Blue & William
To be known as Blue & William, Keppel’s new asset will contain 14,000 sqm of A-grade office area.
“The investment will…see Keppel REIT expand strategically into North Sydney, a major commercial district with positive leasing dynamics,” the buyer’s deputy chief executive officer and head of Investment, Shirley Ng, said.
“North Sydney is New South Wales’ second largest office market after the Sydney CBD and a location of choice for diverse industry sectors including technology, media and telecommunication, as well as the professional services and insurance sectors,” according to a company announcement (story continues below).
“Notwithstanding the pandemic, North Sydney recorded its third consecutive quarter of positive leasing demand in 3Q 2021, with new and refurbished buildings continuing to be drivers of leasing activity,” it added.
“With no new significant supply anticipated for North Sydney until 2024, the market is well placed to absorb the current availability of stock and drive vacancy down.
“The completion of the new Victoria Cross Metro Station [which Lendlease is undertaking] will also enhance connectivity…and support future demand”.
This infrastructure project will reduce the time it takes to commute to Martin Place, in the CBD, to five minutes.
“Upon practical completion of Blue & William, Keppel REIT’s assets under management will grow to S$9 billion ($9.2b) across 11 properties in Singapore, Australia and South Korea.
About 19.5pc of its portfolio, measured by value, is local.
Last year the group paid Goodman $306m for the Pinnacle Office Park at Macquarie Park, about 13km north west of North Sydney.
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