Mirvac sells Locomotive Workshop stake

Quantium and Uber are amongst Locomotive Workshop’s office occupiers.

Sunsuper is paying $231 million for a 49 per cent stake in South Eveleigh’s Locomotive Workshop.

The vendor, Mirvac, will retain the balance of the unique office and retail investment.

The deal reflects a 4.7 per cent capitalisation rate.

Colliers’ Adam Woodward, James Barber and James Mitchell with Knight Frank’s Ben Schubert, Paul Roberts and Graeme Russell were the agents.

Six days ago we reported Mirvac banked $132.8m – a 43pc premium to book value – for the Cherrybrook Village shopping centre, in the city’s north west.

Last month, the diversified investor and developer, with M&G Real Estate, paid AMP Capital $575m for a half stake in the CBD’s EY Centre.

Locomotive Workshop

At 2 Locomotive Street, between the Redfern and Macdonaldtown train stations, the Locomotive Workshop contains 31,000 square metres of lettable area.

Mirvac only recently completed it conversion.

The asset is 97 per cent occupied – office tenants include the Australian National Institute of Management and Commerce, Quantium and Uber.

Romeo’s IGA occupies part of a retail component.

The property forms part of the 13.9 hectare Australian Technology Park – about four kilometres south of the CBD (story continues below).

Coincidentally Mirvac and Sunsuper, with AMP Capital and Centuria Capital, hold the balance of the business park not including 2 Locomotive St.

Commonwealth Bank of Australia recently moved its headquarters to a new building in the precinct.

City fringe resilient in COVID: agent

Financial technology group Quantium occupies 43pc of the 2 Locomotive St office component.

“The Locomotive Workshop offers a truly rare commercial opportunity in Sydney’s burgeoning fringe office market,” Mr Woodward said.

“The site is a unique heritage conversion offering world-class amenities and located in the Central to Eveleigh rail corridor, which will benefit from the NSW government’s $10.4 billion rail infrastructure investment…currently underway,” according to the agent.

Mr Shubert added Sydney’s city fringe office precincts have been resilient throughout the pandemic.

“With markets like South Eveleigh now attracting larger tenants with stronger covenants, investors are looking beyond the traditional CBDs to bolster their office holdings and this is resulting in a narrowing of the difference in capital values,” he said.

Atlassian was recently permitted to construct a 40-storey office at a site, the former Inwards Parcel Shed, abutting the Central train station (in July, it sold a minimum 50pc stake for a price speculated to reflect a sub 4.5pc capitalisation rate).

Next to there, Dexus and Frasers are proposing a $2.5b commercial development with two towers of over 30 floors.

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Marc Pallisco

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