Centuria Divests Sydney Fringe A-Grade Office Building for $116M

• Last remaining asset in a South Eveleigh portfolio owned by the unlisted Centuria ATP Fund
• Fund’s collective divestments achieve 20% IRR, c.10% average annual income yield
• Strong fund performance demonstrates strength of key metro office markets and resurgence of investor appetite

Australasian real estate funds manager, Centuria Capital Group (ASX: CNI or “Centuria”), has divested its last remaining Centuria ATP Fund office asset in South Eveleigh for $116 million to funds managed by Marprop Real Estate Investors and Gresham Property Funds Management.

In April 2016, Centuria acquired the A-Grade office building at 13 Garden Street, South Eveleigh NSW along with two other assets, BioMed Building at 1 Central Avenue and the Belltower at 6 Cornwallis Avenue, as part of the Centuria ATP Fund (‘Fund’).

Following its final divestment, the Fund will facilitate a 20% IRR and delivered a c.10% average annual income yield during its term.

Jesse Curtis, Centuria Head of Funds Management, said, “We are extremely pleased to deliver such a strong return to our Fund investors across the past nine-year period. The Fund began with three buildings within the South Eveleigh business precinct and since 2016 the area has undergone significant regeneration and urbanisation, including improved transport infrastructure and connectivity, resulting in strong rental growth within this prime fringe location.

“We believe this recent divestment signals a turning point in the metropolitan office market, and a resurgence in investor appetite for modern, sustainable properties. This, coupled with growing evidence of momentum in office-centric workforces led by government departments and large corporations, point to positive medium-term tailwinds.

“Furthermore, key economic drivers including population growth spurring white-collar employment and anticipated future office supply contracting as economic rents are expected to outstrip prevailing market rents, provide compelling fundamentals for office investment.”

The A-Grade office building is 250-metres from both the newly opened Waterloo Metro station and Redfern’s Southern Concourse, the latter providing direct connections to six of eight Sydney Heavy Rail commuter lines.

Marprop Real Estate Investors, in co-ownership with Gresham Property Funds Management, confirms 13 Garden Street has been acquired on behalf of their respective managed funds in line with their respective investment strategies.

Cushman Wakefield’s Steven Kearney, Jack Harrison and Kenny Duncanson, and Knight Frank’s Jonathan Vaughan acted on behalf of Centuria.