The NSW LPI last week registered the sale of 50% of 1 O’Connell Street for $334.5M reflecting a transfer of the asset from Harina Company Ltd (a wholly owned subsidiary of ADIA) to the Trust Company. No stamp duty was payable on the transfer suggesting that it was part of a corporate reconstruction to interpose a trustee into the ownership structure. ADIA may be doing this to bring a local level of governance into the ownership process and or to allow a more effective mechanism for them to replace capital if required. The sale does however suggest that the whole asset is worth $669M, but somehow I don’t think so. 1 O’Connell Street is a 36-level office building with a net lettable area of 35,050 sqm of office space over 28 levels and Wintergarden Plaza, 2,744 sqm of net lettable retail space over three levels, plus two basement car park levels for a total of 75 cars. The ADIA transfer represents a capital value of $17,701/psm, which is well under market value for the asset with recent transactions of inferior assets trading above $19,000psm. #Commercial
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