Real IS pays record $97m for Surry Hills office

Surry Hills House was renovated before being offered for sale.

Real I.S. Group is paying $97 million – a Surry Hills record – for its 12th Australian commercial property.

Surry Hills House at 10-14 Waterloo Street with the neighbouring office component of 1 Lacey St was offered by Cornerstone in May after a three year renovation costing $25.6m.

Combined the assets contain 6951 sqm of high-end workspace.

Software group Canva is one of the 14 occupiers.

The Weighted Average Lease Expiry (by income) is a short 2.8 years.

Based on the passing net income (and there is a small vacancy) the parties have settled on a 6.2 per cent yield.

JLL’s James Aroney and Mitch Noonan with IB Property’s Steffan Ippolito were the agents.

Real I.S. Group’s 12th local asset

Real I.S. Group’s newest properties are two kilometres south of the GPO.

Surry Hills House was developed in 1973 and rises nine floors (story continues below).

The office component of the c1912 1 Lacey St, also known as 119 Kippax St, is six storeys at its tallest.

Single floor tenancies of more than 700 sqm could be created.

Both buildings have a two-level basement car park – altogether offering 49 bays.

A roof terrace was installed as part of Cornerstone’s refurbishment.

A Real I.S. Group statement said “the buildings are close to the main station which enables it to benefit from the Central Station Technology Precinct project initiated and overseen by the government and technology player Atlassian”.

The Munich landlord intends to slot the investment into the Real I.S. Australian Institutional Portfolio.

“The asset is a perfect match for our fund investment strategy which we have continued to rigorously implement with this second acquisition on behalf of our investors,” according to the manager’s global head of Investment Management, Axel Schulz.

“Surry Hills House is considered one of Sydney’s most modern office buildings in the creative centre of Surry Hills,” the executive added.

“The refurbished interior, designed in the style of a New York loft from the 1950s, is top quality and fosters a creative working environment, which is ideal for the creative and technology sector”.

The properties are about two kilometres from the GPO.
Cornerstone created a rooftop deck as part of a c$25.6 million refurbishment.

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Marc Pallisco

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

Marc Pallisco