Rosebery Value Add Attracts Interest14 December 2020
Freehold Investment Management has successfully completed the acquisition of an inner-city office building through an off-market transaction with its long-term partner, Eagle Property Group.
The 5-level office building in South Sydney at 55 Mentmore Avenue, Rosebery was acquired for about $30 million from a private investor who had purchased the property after the GFC.
The building is ideally located at the prominent corner of Mentmore and Morley Avenues and sits on a large 2,931sqm site directly opposite the destination retail offering, The Cannery.
The office space offers a Net Lettable Area of 5,316sqm with 50 basement and 10 on-grade parking spaces. The sale was facilitated by JLL Director of Capital Markets, Mitch Noonan.
The property was sold with an initial passing yield of 3.13% however as the asset is on two thirds leased, the fully let passing yield is expected to increase to circa 6.3%.
According to JLL, the average passing gross rent is $364/psm pa vs the market of $534/psm pa.
Grant Atchison, Managing Director of Freehold, said “In recent years, we have partnered with Eagle Property Group on a number of value-add commercial assets. 55 Mentmore Ave is our third opportunity. The property is well-located in an inner Sydney growth area that is going through significant urban renewal and offers a compelling value-add potential. We plan to invest in the asset and lock-in long term tenants. Our previous two partnerships have been very positive for our investors and we’re confident this acquisition will deliver similar benefits.”
Rosebery is adjacent to the Green Square Town Centre where the NSW State Government and the City of Sydney alongside the private sector are leading an $8 billion urban renewal project. The broader Green Square precinct represents one of Australia’s fastest growing neighbourhoods with over 30,000 new residential dwellings expected by 2030.
Lawrence Kopping, Director of Eagle Property Group added “From an investment perspective, this property is attractive for a number of reasons. It’s located within a significant urban renewal project; there is a densely populated workforce cluster in the surrounding precinct; nearby access to public transport and major road networks; the proximity to the airport; and the continuing interest from a range of businesses looking for a modern flexible working environment.”
- 5-storey office asset
- Located on the prominent corner of Mentmore and Morley Avenues on a large 2,931sqm site
- 5,316sqm NLA with 50 basement and 10 on-grade parking spaces
- Compelling value-add potential through short-term WALE of 1 year and a 32% vacancy rate