Avari Capital buys historic 45 York Street, celebrates $1B AUM

Avari Capital, the private equity-style real estate fund, has purchased a controlling stake in the historic AWA Building at 45 York Street, Sydney for $38.8m, as the firm marks $1 billion assets under management.

Founded in 2014, Avari specialises in quick-turnaround value-add commercial property transformations, a strategy that has returned over 20% gains to investors every year. Founder and Chief Investment Officer Alan Liao said 45 York – which was once Sydney’s tallest building and featured in hit film The Matrix – was a perfect addition to the Avari portfolio.

“Our model is very active – we find undervalued assets, refurbish them, fix the tenancy and management issues, and exit – our holding period is typically 24-30 months,” he said. “45 York is such an iconic art deco building, and we are really excited about bringing it back to life.”

This deal adds to a busy 12 months for Avari, joining a number of transactions including:

• 355 Spencer St, Melbourne, another historical building that the company acquired in Oct 2021 and is refurbishing and has partially re-leased to a Government agency for a ten-year period. The building was purchased for $38.5 million and is currently valued at $55-60 million.
• 77 Corish Circle, Banksmeadow, the headquarters of Nudie Juice that was purchased for $8.6 million and sold 14 months later for $15.88 million.
• 10 Hobart Place, Canberra, purchased for $17.75 million, that will undergo refurbishment and re-leasing.
• A 20-unit apartment block at 400 Pacific Highway, Crows Nest, that will be redeveloped.
• $200 million in private lending to the property development sector, where Avari offers an active-management service as part of their debt deals.

“It’s a very competitive landscape right now, with lots of investors on the hunt for yield,” Mr Liao said. “However, we think this period of cap rate compression is coming to an end, which plays well to our active management approach, but won’t be ideal for those who are banking on making returns simply from the market going up.”

Avari has offices in Sydney and Melbourne. The firm takes in capital from both wholesale and institutional investors, with global private equity firms funding their larger deals over the past two years.