1 Castlereagh Street in Sydney’s CBD sold for $196.4 million

A 27-storey office and retail building at 1 Castlereagh Street in the heart of the Sydney CBD has been sold for $196.4 million.

The property, which is located on a 1,164sq m site on the corner of Castlereagh Street and Hunter Street, opposite the entrance of the newly completed Sydney Metro at Martin Place Station, has a net lettable area (NLA) of 12,418sq m.

It was purchased by SLMC Property Australia Pty Ltd (a wholly owned subsidiary of Sim Lian – Metro Capital Pte Ltd in Singapore) following an off-market campaign run by Knight Frank agents Dominic Ong, Paul Roberts, Ben Schubert and Jonathan Vaughan.

The freehold asset at 1 Castlereagh Street has undergone a recent transformation to provide 12,418sq m of total NLA including 11,694sq m of quality office accommodation over 23 levels and 724sq m of retail space on ground and lower ground, as well as basement parking for 28 vehicles.

The building was extensively refurbished in 2020-2021 at a cost of $24 million for two storeys of penthouse office, and plant and equipment relocated.

Additionally, an estimated $13 million of capital expenditure works was completed for a new lobby, tenant amenities, façade maintenance, and ground floor retail, alterations and upgrades to the lower levels, repositioning of the facade to the street alignment, tower lobby, new retail tenancy at lower ground floor and reconfiguration of basement and lower ground floor.

Major tenants in 1 Castlereagh Street, which is around 85% occupied, include Dental Boutique, Citrus Group, the Recruitment Company, Verkada Australia, Wrays and Red Bottle.

Mr Ong said the property attracted significant buyer interest from a wide range of parties, with the successful purchaser drawn to the strategic location of the property.

“1 Castlereagh Street is situated within the heart of the Sydney CBD’s financial core and is in the epicentre of the evolving CBD, surrounded by Australia’s most iconic buildings including One Circular Quay, Brookfield Place, Martin Place Metro Towers, and Chifley South,” he said.

“The property is also directly opposite the newly opened Martin Place Metro Station entrance and within close proximity of the CBD’s world-class transport options including rail, light rail and the ferry.

“Offshore investors, particularly those from Singapore, have been very active in Sydney’s office investment market this year, with the sale of 1 Castlereagh Street being the latest purchase.”

Knight Frank’s recently-released Horizon Report III – Look Beyond the Norm APAC report found Australia was predicted to be the number one destination for cross-border capital in Asia Pacific’s commercial property market in 2024, likely to attract 36% of total cross-border flows over the year.