Stockland confirmed this week that it has entered into agreements to acquire two office buildings in North Sydney, adjacent to its existing office building at 110 Walker Street, for a combined price of $121 million, in line with recent transactions in the area.
118 Walker Street was owned by Menora Nominees who are associated with the Graf family, the original founders of Stockland. Menora Nominees acquired the site around the same time, Stockland acquired 110 Walker Street. 118 Walker sits on a 902sqm site and comprises a 6 level office building with approximately 4,382sqm of NLA. Whilst the acquisition price is not yet disclosed, we understand that Menora were offered in excess of $85M for the asset from a number of off market buyers.
122 Walker Street sits on a 437sqm site and is owned by Talish Pty Ltd, a real estate agent operating out of Chatswood. The three fully let buildings, including Stockland’s existing asset, comprise approximately 10,000sqm of NLA combined.
The acquisitions of 118 Walker Street and 122 Walker Street will more than double Stockland’s existing Walker Street landholding, creating an amalgamated landholding of almost 2,300sqm within the prime North Sydney CBD, in close proximity to the future Victoria Cross Metro Station.
According to Stockland, subject to approvals, the amalgamated Walker Street site will have the potential to accommodate up to 60,000sqm of prime office space in the future, however the development potential of the three sites is likely to far exceed this.
The revised LEP for North Sydney has no FSR constraints and permits development of the site up to 260m in height (approx 57 levels). Even with floor plates of 2,000sqm, the potential GFA is likely to exceed 110,000sqm and the NLA, inexcess of 93,000sqm.
It is possible Stockland may not fully develop across the whole site as large floor plates tenants are difficult to find in sufficient quantity to fill that much space in North Sydney. It will be one to watch. The acquisition of 118 Walker Street completed today and the acquisition of 122 Walker Street is expected to be complete in July 2020.