North Sydney offices to sell for more than $100 million
Joint owners Property Bank Australia, Security Capital Corporation and RG Property are selling their A-grade office complex in North Sydney with price expectations of more than $100 million.
The location of the two-building property at 116 Miller Street and 173 Pacific Highway opposite the future new metro station, Victoria Cross, motivated the owners to sell and take advantage of a buoyant market.
CI Australia’s Bevan Kenny and Chris Veitch and Knight Frank’s Tyler Talbot, Angus Klem and Dominic Ong are marketing the property.
“Not only will North Sydney’s CBD be re-centred around the station, the upcoming metro line will see travel times to Sydney significantly improved – an incredible opportunity for investors to get in early before these changes take place,” Mr Talbot said.
“Due to the repositioning of North Sydney’s CBD, 116 Miller and 173 Pacific Highway have the opportunity for solid rental growth upside and value appreciation,” Mr Kenny said.
“We’re currently experiencing strong demand in North Sydney with leasing at an all-time high and effective rental growth forecast to increase dramatically over the next five years. This is expected to be higher again once the new metro comes on line in 2024.”
The eight-storey building at 116 Miller Street has ground floor retail and office tenants such as Commonwealth Bank, ANZ and Salmat Mediaforce. The four-story building at 173 Pacific Highway has development potential for four additional floors. It is leased to the School of Physiotherapy for the Australian Catholic University.
The North Sydney CBD has already undergone many changes due to the new station, mainly business displacements from compulsory acquisitions. This has resulted in a scramble for limited office space in the North Sydney CBD.
In the first half of 2016, 28,265 square metres were withdrawn in North Sydney with an additional 72,538 square metres mooted for withdrawal over the next five years, Colliers International’s latest metro office update says.
Yields have been compressed as have sizes of leases to sub 500 square metres. Many refurbished B-grade spaces have been subdivided. Gross rents have increased by up to $50 to $80 a square metre in the first half of 2016 and vacancy is around 7 per cent.
This is not likely to improve against a forecast of 81,500 new jobs by 2036.
