Marprop has paid $35.3 million for two neighbouring Newcastle offices – one with significant medium-term development upside.
The deal with Eagle Property Group for 51-55 and 61 Bolton Street was struck on a 6.5 per cent net passing yield.
Both parties are Sydney based.
CBRE’s Scott Gray-Spencer and Jack Morrison with Commercial Collective’s Matt Kearney were the marketing agents.
All up the fully leased assets contain 6142 square metres of lettable area and 81 car parks.
Following a new 15-year rental agreement with the federal government for 56 per cent of the overall space – the weighted average lease expiry is 8.7 years.
Prior to Eagle, the investments were owned by Coal Mining Services Australia.
The Newcastle properties
One of the properties – 61 Bolton St – operates as the Newcastle Family Court.
On 1448 sqm it contains a five-level structure with 41 parking spots.
The federal government recently extended its lease, initially set to expire in 2023.
Next door, 51-55 Bolton St rises four storeys and is tenanted to the NSW government’s Legal Aid, WSP, Braye Cragg Solicitors and DXC Technologies (story continues below).
Its sits on a 2181 sqm R4 High Residential zoned parcel which – when it was last for public sale four years ago – was spruiked for its potential to be replaced with a taller apartment complex, hotel, vertical aged care complex or university.
The historic Toll Cottage, once known as Rose Cottage and one of the town’s oldest buildings, sits behind this office.
Mr Gray-Spencer said there was potential to add value through repositioning, cosmetic refurbishment and expansion.
The sites, he added, are near Doma Group’s $200m The Store at 854 Hunter St, which will contain a 12-level, 15,000 sqm office and two 30-storey apartment buildings.
Marprop continues east coast spending spree
Early last year, Marprop with Germany based GLL Real Estate paid Singapore’s Philip Lim’s Wharf Street Investments c$80m for Bendigo Bank’s headquarters at 120 Harbour Esplanade, Docklands, in Melbourne.
The landlords also that year outlaid $20.6m on an adjacent seven level office, 17 Moore St, which at the time was 85 per cent vacant.
In Melbourne, Marprop and GLL spent $65m on an investment with development upside at 541 St Kilda Road.
In late 2017 the groups paid $78m for an office at 157 Walker St, North Sydney.