SC Capital Confirm North Sydney buy for 5.0% yield

8 March 2020

SC Capital have confirmed their acquisition of 2 Elizabeth Plaza North Sydney for $127m.


SC Capital has acquired the property for its SCORE+ Fund from BlackRock who have benefited from rental increases in the North Sydney market in recent years. Blackrock acquired the ­office block two years ago from Marprop Real Estate Partners for $81m.


The deal with SC Capital represents a passing yield of 5% and a capital value of $16,752/sqm of NLA. The building is fully occupied with a 4 year weighted average lease expiry.


Founded in 2004, SC Capital Partners Group (SCCP) is an employee-owned, Pan-Asian real estate investment management firm with over $7 billion in assets under management across five discretionary closed-end opportunistic funds, one discretionary core/core-plus fund and two listed REITs, including the largest hotel REIT in Asia Pacific, Japan Hotel REIT.


The acquisition of 2 Elizabeth Plaza follows the recent purchase of 2 Wentworth Street for $105.3m, a fully leased, Agrade office tower in Parramatta CBD. Both acquisitions are consistent with SCORE's investment strategy to acquire high quality assets located in growth corridors within gateway cities of Australia, New Zealand, Japan, South Korea, Singapore and Hong Kong.


Suchad Chiaranussati, Chairman and Founder of SC Capital Partners commented, "With its prominent location in one of the most attractive office markets in Australia, 2 Elizabeth Plaza is well poised for strong rental growth. The acquisition is consistent with SCORE's strategy of acquiring well-located, income generating assets in a market that boasts strong fundamentals."


2 Elizabeth Plaza is located in the core of North Sydney's Central Business District. The 7,581sqm, B Grade office tower with ground floor retail and basement car park is well positioned to leverage the planned and in-progress public and private investment that will significantly enhance connectivity to a revitalised North Sydney.


The building is located mid-way between two train stations, the existing North Sydney train station and the proposed Victoria Cross Metro station, which is due to be delivered in 2024 as part of the new Sydney Metro train network. The property has frontage to Brett Whiteley Place, a recently upgraded plaza and community hub, which sits at the heart of the Central Laneways Precinct, a government commitment to activate the ground plane with new public spaces, restaurants and cafes and enhance the pedestrian link to and from public transport hubs.


North Sydney is a direct beneficiary of the North Shore's unprecedented infrastructure spend due to strong population growth forecasts for Sydney over the next 20 years. Major public transport and road infrastructure projects will accommodate the density of employment required by a growing city.


The private sector has responded to the stimulus with multiple premium / A-grade office developments including 100 Mount Street, 118 Mount Street and 1 Denison Street recently completed or set to be delivered in 2020. Landlords are also taking advantage of the momentum to reposition existing assets.


he sale was brokered by Chesterton International and Cushman and Wakefield.