Developers circle $200m worth of sites in Sydney CBD
Developers are looking at a range of properties across the Sydney city worth a combined $200 million that come with high-profile tenants but also have the ability to be redeveloped when market conditions stabilise and
Telco giant Telstra is offering up a potential development site near to the city’s new tech hub at 200 Broadway as a sale and leaseback deal, at a price, as judged by similar assets, of around $60 million to $70 million.
The freehold Chippendale building is currently utilised as a telecommunications centre and comes with a triple net, five-year lease to Telstra, providing significant income security from Australia’s largest telecommunications company.
CBRE’s Harry George, Kenny Duncanson and James Parry have been appointed to steer the sale and leaseback campaign and said interest in long-leased commercial assets with future development potential is expected to underpin demand for the building in Sydney’s CBD-Broadway corridor.
There is also a B4 Mixed Use zoning attached which allows for significant development, refurbishment, or conversion potential in the longer term.
“The building neighbours the $3 billion Silicon Valley-style Tech Central hub earmarked for the Central Station precinct and is situated in a major university catchment which is positioned to benefit from a resurgence in international students and migration,” George said.
“This, coupled with the asset’s secure holding income, will underpin interest from value-add groups and developers, allowing an incoming owner to ride out any future market volatility.”
The current building has an estimated gross floor area of 8852 square metres, with a basement and lower ground floor car park, ground floor and three upper levels and sits on a 1770 square metre site.
Parry said for a developer there is the potential for build-to-rent, other residential uses, or office development, given the tight supply of commercial and residential space in the CBD-Broadwaycorridor.
There is also last mile logistics, education, or data centre uses as other possibilities subject to the relevant planning approvals.
Telstra is being advised by CBRE’s Structured Transactions & Development Advisory’s Tom Fowke and Gerard Graham together with Deloitte’s Kelwyn Teo.
Further north is an office tower at 160 Sussex Street being offered with price expectations of around $130 million.
The 15-storey property covers 8270 square metres on an 854 square metre site. Currently, its occupancy is 82 per cent, with the Education Centre of Australia, Victoria University being the primary tenant, occupying nearly half of the building.
The B-Grade freehold office asset is being sold by Knight Frank agents Dominic Ong, Graeme Russell and Linda Zhu of Knight Frank with Shirley Fan, Michael Stokes, John Bowie Wilson of CI Australia.
The agents said it was completed in 1992 and major refurbishments were completed in 2012 at an estimated cost of $5.3 million.
“The asset is positioned in the corporate epicentre of Sydney’s CBD, between Barangaroo and Darling Harbour in the Sydney CBD’s western corridor and close to all modes of public transport,” Ong said.
“We expect to field buyer interest from both domestic and overseas investors, with the Sydney CBD internationally recognised as one of Asia Pacific’s top investment destinations.”
