GPT buys Eclipse Tower in Parramatta for $278 million as property groups push into Sydney’s second CBD
The GPT Group has acquired the Eclipse Tower in Sydney’s Parramatta for $277.6 million after months of market speculation on the property’s sale.
Superannuation fund Rest sold the 22-storey office building at 60 Station Street on an initial yield of 5.34 per cent. The fund had bought it for $167 million in 2012.
The property has almost 26,000 square metres of office space and is fully leased with a weighted average lease expiry of four years. Tenants include Deloitte, Bupa, QBE Insurance and Servcorp.
Parramatta’s vacancy rate is the second lowest in Australia. Photo: Supplied
GPT’s head of office and logistics Matthew Faddy said the A-grade office tower would increase its exposure to Parramatta.
The group has already delivered a vote of confidence in the western Sydney suburb, with construction on GPT’s 27-storey 32 Smith Street development scheduled to start this year. It is due for completion in late 2020.
“The NSW Government’s significant level of infrastructure investment around the greater Parramatta area, which includes plans for new light rail, Metro rail and motorway connections, is set to reinforce Parramatta’s importance as Sydney’s second CBD,” Mr Faddy said.
“Parramatta’s office market already has one of the lowest vacancy rates for A-grade office space in Australia and we continue to see strong demand for quality office space.”
Parramatta’s A-grade vacancy rate is at 1 per cent but the figure has gone up from zero in January 2018, Property Council of Australia data shows. Overall vacancy in the suburb edged up 20 basis points to 3.2 per cent due to 25,000 square metres of new supply in the six months to June 2018.
The demand for larger floor-plate sizes has surged in suburban markets, as major tenants place greater emphasis on open areas in workplaces, reduced occupational costs and flexibility when dealing with changing space requirements.
Typical floor plates in Eclipse Tower are about 1300 square metres.
The property also has 148 car spaces and end-of-trip facilities, as well as a five-star NABERS Energy rating and a five Green Star rating.
Nearby, Scentre, which owns Westfield shopping centres in Australia and New Zealand, has lodged revised plans for an office skyscraper above its mall in Parramatta – signifying a growing push from property groups into the suburb’s office market.
The development, which will cost $492 million, will rise up to 42 levels and add 112,000 square metres of office space to the Parramatta market.
Eclipse Tower was sold by Knight Frank’s Paul Roberts, Wally Scales, Tyler Talbot and Neil Brookes along with CBRE’s James Parry, Michael Andrews, Scott Gray-Spencer, Sharon Yang and Marc Giuffrida.
The property is expected to settle in September 2018.
